Benefits change may cost council £600,000By 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.”