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The problem is shared across parishes and services as the changes will affect the council tax base
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Benefits change may cost council £600,000

By Jon Nurse
August 17, 2012

People who get help with their council tax face paying more as the borough council struggles with an estimated £600,000 shortfall brought on by a change in Treasury policy.

At the end of the tax year the government will stop picking up the bill for council tax benefits, and it will become a council responsibility.

Borough residents claim more than £5 million in tax benefits every year, a bill which will now land with Wokingham Borough Council (WBC).

The government has committed to give almost 90 per cent of this deficit in a grant, leaving the council with an estimated £600,000 shortfall.

Graham Ebers, WBC’s strategic director of resources, said: “The government has said we can design our own council tax benefit and discounts schemes to deal with the shortfall – so they’re passing on the problem but are giving us flexibility to address it.”

The council will be able to change the threshold for tax benefit, vary discounts and change considerations over what is included when assessing people’s income.

Mr Ebers said: “We aim to come up with a scheme that will bridge the shortfall so that the impact does not fall on the council taxpayer.

“We will look to protect the vulnerable as best we can and target those who can most afford it.

“We will protect pensioners and other vulnerable groups. We will go out to consultation in a number of weeks on a proposed scheme.

“Agreeing this scheme should mean the borough, parish and town councils, police and fire services are not worse off with regards to the £600,000 shortfall.”

The problem is shared across parishes and services as the changes will affect the council tax base.

Mr Ebers said: “In effect, the government used to act as a council tax payer for the £5 million plus to the borough, whereas from April 2013 it won’t.

“There are 65,894 band D properties in the borough and by taking out council tax benefit we lose payments from just over 3,500 properties.

“It doesn’t affect us at the outset because of the government grant, but going forward we all have a slightly lower tax base on which to fund our future service spending pressures.

“There is a risk going forward that if council tax benefits go up then that increase falls fully on the council, the parishes and the police.

“Therefore it is essential we work together with our community to improve self-sufficiency and reduce benefit take- up where we can.”

Mr Ebers has been speaking to town and parish councils to explain the changes and the impact this could have in the future.

Woodley town councillor Phil Challis said: “There has been some uncertainty. There were some concerns that the money going to the borough council wasn’t ring-fenced, but we have spoken a lot with Graham Ebers and at the moment everything looks as if it might turn out okay.”

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Most recent user comments 11 of 11

The problem with doing things like means testing the winter fuel allowance is that it introduces further red tape and costs. It would be simpler to make it taxable. I would in fact go one step further and replace the winter fuel allowance by an increase in the old age pension by ten pounds a week for the winter months. This would make it a true fuel allowance instead of the current Christmas bonus, reduce the administration cost, and make it taxable as part of the pension.

Returning to the original problem of how these extra benefits should be met, I would introduce two higher council tax bands so that the large properties pay extra tax.

PoneRana, Wokingham
19/08/2012 at 00:04

(just to add, Phil - agree 100% with your sentiment: "I think its more a matter of who loses the least!")

Damiano_Tommassi, Wokingham
17/08/2012 at 16:45

Phil, I think Alex has shown an admirable attitude there; a bit like my stepdad, who's 65 and comfortably well-off (he's earned it, former soldier etc.) - when talk of means-testing the winter fuel allowance was being discussed, he said 'why not, I don't need it, I shouldn't get it'. We need to return to a world where you are paid benefits because you need to be supported to get back on your feet - not because you can't be bothered.

Damiano_Tommassi, Wokingham
17/08/2012 at 16:41

Alex_f,Wokingham - you would need to understand the inner workings of the benefit system and council tax system to make a call on who wins - actually I think its more a matter of who loses the least! - time will tell.

... but does an "I'm all right attitude" really make it right?

Phil Challis, woodley
17/08/2012 at 16:14

Re: the postcode lottery - I would *hope* that this would work in our favour, given that Wokingham's cost of living is significantly higher than most other boroughs, and we probably have a higher percentage of well-off residents to help shoulder the burden.

But to quote DT, "if [it is] done correctly. BIG 'if'".

alex_f, Wokingham
17/08/2012 at 11:17

I claim 20 Bull**** Bingo points for the use of 'Going forward', not once but twice.

Woky Local
17/08/2012 at 10:54

It will become a post code lottery. For example if Reading BC design a different scheme to Wokingham BC then people in the same circumstances on different sides of the borough boundaries could receive different benefits (different sides of the road in some cases).

My quote in the artcile about it being okay relates to the way Graham Ebers is currently approaching the problem posed by the government policy. However overall I believe it is absolute madness and as Damiano_Tommassi says its central government passing the buck (blame!) to local government.

Phil Challis, woodley
17/08/2012 at 10:47

Agreed - I think the 'improve self-sufficiency' sounds more like an aspiration based on a change of the rules, rather than an active programme of some kind - i.e. the concept of tax models influencing human behaviour.

I guess we'll have to wait and see what options the consultation allows us... to be honest I wouldn't mind giving up mine as I know there are worse off than me that could do with keeping theirs, I guess a positive from having these thresholds / limits set locally is that we can take into account the higher cost of living (and travelling!) here.

alex_f, Wokingham
17/08/2012 at 10:30

alex_f, I think that's how it already works, but the 'new' way of doing things means that our local council can decide where that limit is set. For example, 'earn over 2k/year, get no benefits' (I'm sure they won't do anything that ridiculous, though!).

The sentence “it is essential we work together with our community to improve self-sufficiency and reduce benefit take- up where we can” suggests that the council will look at ways to help people avoid falling into the benefits trap, to get better jobs, to be more wealthy and successful. I for one don't believe that will happen, not for a second. Much more telling is "The council will be able to change the threshold for tax benefit, vary discounts and change considerations over what is included when assessing people’s income" - which says to me that they'll basically change the rules so that they have to pay out fewer benefits. Sounds good - if done correctly. BIG 'if', that.

Damiano_Tommassi, Wokingham
17/08/2012 at 09:51

To me it sounds like if you earn over £X year you'll lose any entitlement to discounts (e.g. single person allowance). I guess we're getting used to it by now!

alex_f, Wokingham
17/08/2012 at 09:41

"The council will be able to change the threshold for tax benefit, vary discounts and change considerations over what is included when assessing people’s income." - so.... the national government has told local governments -'We're not going to pay all of the council tax, we'll put 90% of it your way, and it's your job to pay out 10% less. Set some new thresholds that mean that fewer people get paid benefits. That way, you look like the bad guys, and the national government (which is selling playing fields AND lying about the figures) doesn't.' Count the ways in which this government is out of order, and you quickly run out of fingers and toes.