Changes to council tax benefit

Benefit cut by 10% and localised?  What do they mean? Benefit on 90% of Council tax plus DFAs?

Exactly what I wanted to know. I don’t get what they mean at all.

Possibly a cut in subsidy to councils?

The info so far is that the change is much bigger than that.
Govt will pay equivelent of 90% of current funding and LAs design their own CTB scheme based upon local priorities.

From http://www.ifs.org.uk/budgets/sr2010/welfare.pdf

The end of Council Tax Benefit
•CTB to be replaced by grants to local authorities in April 2013, who can choose best way of using money to rebate CT bills
•But grants lower than current spending on CTB. Saves £0.5bn/yr, but means losses amongst poor households
•Attraction is that it devolves power
•But many downsides
–Goes directly against ideas behind Universal Credit
–Creates “postcode lottery”
–Local authorities might use CTB to persuade low-income households to live elsewhere
–100+ LAs designing policy
–Two levels of government share control over tax and benefit redistribution
© Institute for Fiscal Studies

and see the comment in the leader in today’s Guardian

http://www.guardian.co.uk/commentisfree/2010/oct/27/universal-credit-welfare 

Whatever the welfare question, the government offers the same welfare answer – the universal credit. All the problems of waste, fraud and idleness as well as the oddities that arise with snatching the rich’s child benefit are to be washed away with this one soothing solution, brewed up by Iain Duncan Smith. Such is the credence being lent to the IDS credit that the welfare secretary pulled off the exceptional trick of persuading George Osborne – in a barren spending round – to punt him a couple of billion to get the scheme running. Unfortunately, the chancellor also revealed a tweak to council tax which, though little noticed, is strangling this big idea before it has drawn its first breath.
Some of the perversities of social security are an inevitable reflection of the simultaneous need to reward effort and ameliorate poverty, and thus the more overblown claims for the new credit always invited a measure of scepticism. But there is little doubt that there are gains to be had from re-engineering the system with a view to integrating it thoroughly. Just as a television, DVD player and set-top box bought at different times rarely work happily together, the welfare state tends to short-circuit when components devised in different eras all operate at once. A lone parent who is simultaneously paying Lloyd George’s national insurance, facing withdrawal of Norman Fowler’s housing benefit and seeing Gordon Brown’s tax credits being tapered away is very likely to be a lone parent who will decide it doesn’t pay to work. The one serious argument for Mr Duncan Smith’s credit, an argument Labour has bought into, is that it would replace fiendish multiple calculations with a single simpler sum.
Or at least that was the idea until the spending review. For the sake of saving rather less cash than he has set aside for creating the new credit, Mr Osborne seriously undermined it by handing sweeping discretion over council tax rebates to local authorities, together with a sum of money which he freely admits will be 10% short of what is required for funding them properly. In response to that shortfall, new rules will claw back the cash with such aggression that it will pay less to work. And it will not be one set of rules, but different rules in different parts of the country. No universal credit – no matter how well-designed – can achieve a smooth fit with all of these rules at once.
This is no minor detail. Council tax benefit is the one means test applied to just about everyone who is poor – the old, the young, the sick, the well, homeowners and tenants alike. This one botched decision condemns all these groups to continue to live with a system that frustrates good intention and flies in the face of the common sense that Mr Duncan Smith promises.

Its also difficult to see how this will make, another pet govt project, the merging of coucils (with a view to efficiency savings) any easier. I am afraid politicians are going to want to award rebate according to local “prioritioes”.......

The proposals seem likely to, effectively, abolish CTB.

In England, England’s share of overall current CTB expenditure, minus 10%, will be passed on to LAs - presumably not ring-fenced, in the guise of ‘locality’.

In Scotland, the share of overall current CTB expenditure, minus 10%, will be added to the Scottish Government general block grant. ‘Share’ here might be Barnett formula share of total CTB expenditure, or actual costs share - the two will give different figures.

In Wales similarly, the share of overall current CTB expenditure, minus 10%, will be added to the Welsh Assembly general block grant. Same remarks apply regarding ‘share’.

There are (AFAIK) no plans to replace Council Tax in England, or Wales; so there will continue to be liability there. In England any rebates will be by individual LA; in Wales there might be a national rebate scheme or LA-specific ones (a matter for the Welsh Assembly to decide).

In Scotland there have long been plans to replace Council Tax, and it is very likely that it would be replaced in 2013 (though by what exactly is another matter that will be clearer post the May 2011 election). It is possible that the replacement tax would not have a rebate scheme (if liability was income-linked, for example).

Northern Ireland is stuck with domestic rates, and AFAIK there are no plans to replace this.

Whatever details emerge, it’s clear that ‘tax on households to partially fund local government’ is going to be fragmented across the UK and - in England at least - to the level of the LA and their individual inventiveness.