Universal credit holds up council tax support reforms in South Ribble

Fresh proposals for a new scheme to support low income households with their council tax will be put forward next year.
Fresh proposals for a new scheme to support low income households with their council tax will be put forward next year.
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Changes to the universal credit system announced in last month’s budget have delayed a planned overhaul of a council tax support scheme for residents in South Ribble.

The borough council was due to consult on a series of options - which included the possibility of scrapping a minimum £3.50 per week charge for all low income, working-age households.

READ MORE >>> Row over council tax contributions for low income households

Cabinet members heard that the phased introduction of universal credit in the area - which began in July and combines six benefits into one payment - makes administering a council tax support scheme a challenge for the local authority and “confusing” for residents.

The authority will now reconsider the options it puts to the public, after the chancellor of the exchequer announced further benefit changes which increase the amount of money individuals can earn before they start to have universal credit withdrawn. Payments of the new benefit also change regularly, in response even to minimal changes in income

Deputy leader of the Conservative-run council, Caroline Moon, defended the delay and said any consultation must be “genuine” and consider the potential implications on people in need of support with their council tax bills.

“Anybody who is working up-close with universal credit, understands that it changes monthly and...to try and come up with an arbitrary figure for council tax support [is] doing people a genuine disservice.

“The issue with this scheme in the first place is that we think it punishes people and is causing hardship - why would we want potentially to create more?” Cllr Moon asked.

But a row was reignited over whether the council had already pledged to scrap the minimum charge in its budget earlier this year.

Labour opposition group leader Paul Foster said: “It is appalling that the council made a decision in February to remove the council tax support scheme - but as we sit here today, nothing has even gone out to consultation yet.”

Cllr Moon responded that the scheme could not have been scrapped at this year’s budget meeting, because the legally-required consultation had not then been carried out. But she added that the authority was no longer banking on income from the charge - on the basis that it could come to an end after the consultaion is completed.

South Ribble Council will also have to ask for the opinions of other public bodies who take a share of the council tax collected in the area - and which could take a hit to their own incomes if changes are eventually approved.

While scrapping the £3.50 charge would cost South Ribble itself just under £70,000, Lancashire County Council would be almost £400,000 worse off.

The police and fire services in the county would also lose tens of thousands of pounds under the proposal.

Papers presented to cabinet members show that South Ribble also plans to increase publicity of special hardship funds for residents struggling with council tax and housing payments.

Cllr Moon told the meeting that she would rather see the pots of money distributed automatically based on the council's knowledge of those in particular need.