Will The Universal Credit Reforms Improve The Benefits Service For Users?

A study by the Centre for Economic and Social Inclusion (CESI) found support for welfare reform, but identified risks that need addressing if UC is to bring about real improvements for all service users. It found that:

    *Switching to monthly single payments is a significant challenge to low-income families.

    *The scope and scale of financial support and advice to help people through the transition need urgent clarification. Payments of UC need to be explained clearly and regularly, with the elements intended to support children identified separately.

    *Service users must be informed about how schemes are changing locally. Minimum national standards for face-to-face services and replacements for the Social Fund would help transparency and consistency.

    *The Government needs to review the impact of localisation on UC’s key aims. If evidence suggests that the main benefits of reform have not been realised, localisation would need reconsidering.

    *There needs to be a more visible ombudsman for the benefit and employment services system.

Download the report from the CESI website.

Late Changes to Council Tax Benefit Reforms

In a ministerial statement recently the government announced a significant change to its policy to localise Council Tax Benefit (CTB) from next April. The government is proposing to localise support for council tax from 2013–14, abolishing CTB across Britain and giving grants to local to design their own systems for providing support for council tax to low-income families. On top of this, the government planned to cut by 10 per cent the funding it provides for council tax support. This would save around £500 million a year.  The effect is that localisation would create considerable complexity just as Universal Credit is being rolled out with the intention of simplifying things.  Now, new proposals have been announced.  A £100 million package will be available to councils whose schemes meet a particular set of criteria that the government considers “best practice”. It will, apparently, be available for one year only. Councils will be eligible for the money if nobody currently on full CTB ends up paying more than 8.5% of their council tax liability (the costs of collecting such small amounts from very low income households who are not used to paying council tax mean that councils may well prefer to give a full rebate to such households); if the rate at which the benefit is withdrawn as income rises is no higher than 25% (compared with 20% at the moment); and if there are no “cliff edges” in the system.  Read more on the Institute for Fiscal Studies website.

Town Halls Must Tackle £1bn Council Tax Benefit Fraud and Error through Localisation

Local authorities must get to grips with the £200m of Council Tax Benefit lost each year through fraud and error so they can fully support hard working families and genuinely vulnerable people. Spending on council tax benefit has more than doubled since 1997. Figures show that since 2006 council tax benefit fraud and error has cost the taxpayer an estimated £1.1bn, an average of around £3m per council. Giving councils a stake in providing council tax support will assist local job creation, promote enterprise and reduce welfare dependency.  According to Eric Pickles, Government reforms will localise council tax support putting councils, who already raise and collect the tax, in charge of the discount. This will give councils a stronger incentive to support local firms, cut fraud, promote local enterprise, end the something for nothing culture and get people into work.  As part of that deficit reduction strategy councils will be expected to save over £400m a year when they begin running local council tax support schemes next year. Councils will keep all savings they can make from reducing fraud and error.  Read more on the CLG website.