Council tax help to be scaled back

HARD-up council-tax payers are set to see their support reduced to cope with multi-million pound cuts.

Nearly 27,000 people across Oldham receive council-tax benefit, to help them cover the cost of their bills.

Many now face having their payments reduced, or stopped completely.

Under new reforms announced by the Government, councils are to be handed control of the process — and ordered to find 10 per cent savings.

And if they can’t cut the cost, local authorities — already facing huge grant cuts — could be left further out-of-pocket.

Currently council-tax benefit is worth between £16 and £18 a week, and covers up to 90 per cent of a bill.

Oldham has 26,720 claimants. The 10 per cent target means a reduction of almost £2.36 million.

Communities Secretary Eric Pickles said the move would lead to a “fairer” system and persuade councils to cut down on fraud and errors, which he said cost £200million a year.

The Local Government Association welcomed councils being given the power but was concerned over having to find a 10 per cent cut.

Councils are expected to be given freedom on how to find the savings, either by cutting the number of people receiving council-tax benefit or reducing the amounts paid out.

Although elderly people are to be protected from a cut to their payments, there are no guarantees for other taxpayers.

The Government’s consultation paper on the proposals says: “If your local authority does not think that you are among those who need most support, as a result of these changes, you might have to pay more of your council tax than you do currently.”

Under the current system, councils receive a rebate from central government for the amount of council-tax benefit it needs to cover those who are eligible.

From 2013, councils will be given a set amount in advance, based on previous year’s totals and including the cost-saving target.

This could also have implications for the finances of the councils, which are already facing multi-million pound reductions to their grants.

The consultation document says there is a risk that “local authorities struggle to collect increased amounts of council tax from those households who experience a reduction in support with their bill.”

Mr Pickles said: “Local authorities will have much greater freedom to administer rebates in a way that best meets local needs and best supports local people, while safeguards will be put in place to protect the most vulnerable, including pensioners, from any reduction in the support that is on offer.”