New Council Tax Support Impact Assessment

Just published at http://www.communities.gov.uk/publications/localgovernment/lgfblocalisingcounciltax.

It seems strangely unfinished - lots of blank spaces where answers should go and a starting of the new scheme given as 01/01/2010.

However it looks at 3 scenarios when considering the impacts (and it’s based on protection for older people starting at 65 even though the real age will be QASPC so it’s underestimating the cost and numbers).

The scenarios are:

Scenario 1: All working age claimants have their award cut by 16%.
Scenario 2: Increase the taper for all working age claimants to 25%.
Scenario 3: Introduce a stepped scheme - In this scenario, local authorities would provide council tax support for the full liability when gross earnings are below £100, half support when gross earnings are between £100 and £150, and no support when gross earnings are above £150.

We also see how the change will give local authorities an incentive to help people into work.

Incentive for authorities to promote employment
76. A fixed budget will provide stronger incentives for authorities to get people back into work because authorities will have to fund any excess in expenditure themselves (or will get to retain any surplus of funding over expenditure). By giving local authorities a stake in providing support for council tax, this reform is intended to give councils a greater stake in the economic future of their local area by strengthening the incentive for local authorities to help residents back into employment and so reduce demand for support and lessen the effect of the funding reduction.

In terms of savings achieved, the IA says:

The preferred option is to localise support for council tax in England, and cut expenditure by 10% against forecasts by the Office for Budget Responsibility. Although the quantified costs and benefits show a zero net benefit/only a small net benefit/a negative net benefit for the preferred option Ministers have decided that localisation is to be preferred because it:
- Secures the scored saving;
- Enables local authorities to decide how the saving is to be achieved, balancing their assessment of the likely impacts on council tax collection rates, priorities for local tax-payers and their overall financial position;
- Reinforces local financial accountability.