Council Tax Benefit Localisation

Clive Betts Excerpts

Wednesday 27th June 2012 Westminster Hall

[Mr Clive Betts (Sheffield South East) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate my hon. Friend the Member for Makerfield (Yvonne Fovargue) on securing this important debate. I want to make three points. The first goes back to something that the Communities and Local Government Committee said in October, following the evidence that we took last July. We were against not the principle of the changes but the way in which the Government were going about them. Importantly, we said:

“We recommend that the Government delay the introduction of the new Council Tax support system by a year or more, if consultation with local authorities indicates that this would reduce the risks inherent in introducing many complex changes concurrently.”

That is an important point. Since then, the Local Government Association has repeatedly said that it has concerns with the timetable. In its briefing to us, it said that it urged the Government

“to give councils the necessary time to do this in the most considered, flexible and cost-effective way possible.”

In January, Capita wrote to all the local authorities for which it provides services, saying that it did not think that it could deliver the necessary systems in the time scale. I do not think that that advice has changed. Certainly, when I spoke this morning to Councillor Bryan Lodge, the cabinet member for finance in Sheffield, he said that the advice had not changed. When we had the debate on the Local Government Finance Bill in January, it was interesting that the Minister did not draw attention to that letter from Capita, although he was well aware of it at the time.

What is the situation now? Are the Government saying that despite all the concerns of local councils, the LGA and service providers such as Capita, they believe, in their wisdom, that this can all go ahead on time and without any problems—not just for councils and the administrators, but for the people who receive the benefits at the end of the line?

I just think back to Sheffield in 1999 when we had privatised the housing benefit service and transferred it to Capita in a rushed and botched way. I remember the constituents, often elderly, coming to my surgeries in tears not because they had done anything wrong but because the administration of their benefits was in chaos and, as a result, the arrears on their council tax and rent had risen. They were distraught because they had never been in arrears in their lives. I worry that we will go back to that situation.

The responsibility will be not with local councils but with the Government who will push this through on an unacceptable and unattainable timetable. I say to the Minister that it is not too late to stop. I am talking about not the intention but the ridiculous timetable on which the Government have embarked. If this was simply a question of localism and of saying to local councils, “Do it the way you want,” there would not be a problem.

[George Hollingbery (Meon Valley) (Con)]

rose—

[Mr Betts]

I will give way to the hon. Gentleman, who is a member of the Communities and Local Government Committee.

[George Hollingbery]

I am a member of the Select Committee and have something to do with the production of its report and the idea behind it. I have always recognised that this is something of a complex area.

Does the hon. Gentleman agree that there are some very real technical complexities in putting this system in place, but there is also an appetite among Ministers for shared systems and projects across large local areas? For example, in Hampshire, there are 16 different district councils, so a shared scheme across the area would make a lot of sense; it would save money in administration and so on. Necessarily, though, it will be a complex system to put in place, with legal agreements that will need to be considered and thought through. A little more time for that might also be very welcome.

[Mr Betts]

The hon. Gentleman makes a good point; we will get a better scheme for having it slightly later. The savings will be better, as will the service to our constituents.

I say to the Minister that if this was simply a question of saying to local councils, “Get on and devise your own schemes,” they could do it. The problem is that they do not know how to devise a scheme in respect of the advice and detailed regulation that come from Government, because they have not got it yet. It is because the Government are insisting on regulating the details of a localised scheme so closely that they are in these difficulties.

I have two further brief points. One is about the 10% cut. If councils cannot devise their own schemes, they will have to opt for the existing scheme, which means that they will have to find the 10%; £4.5 million in Sheffield on top of the £200 million of cuts that the council is trying to make. That goes for every council in the country—cuts on top of cuts. That is the problem that the Government are forcing on local councils. There is the invidious choice of finding this money from other services, which are already being cut very substantially, or making the cuts in the benefits of people of working age on top of the cuts in benefits and working tax credits that those same families are having to take. It is the cumulative effect on those families that the Government have done no proper analysis of.

Finally, we still do not know from the Government how the administration of the system will work. They are localising council tax benefit and centralising housing benefit. There is a simple arrangement now for people whose income changes: they go down to the local council and speak to someone. In Sheffield, there is the home visiting service for the elderly and disabled, where someone comes along and helps them sort out both benefits. Now we will have a council tax benefit that we go to the council for and a housing benefit that we will have to go online for—or on a telephone to someone in Jobcentre Plus. For elderly people, that will be an impossible arrangement.

The Government say they will talk to local councils to find a way forward. As I understand it, there is no clear idea from the Government about how these two complex benefits will be arranged in the future when we will have two completely separate systems that people have to go through to get their problems sorted out.

--- Later in debate ---

[Andrew Stunell]

No, I will not give way on any points, because I want to proceed.

In another part of the Local Government Finance Bill, we are giving Wigan metropolitan borough the capacity to change its current discounts and exemptions for empty homes and second homes. Wigan metropolitan borough, which I am sure the hon. Member for Makerfield would agree has considerable social and economic problems, will be able to raise £2,173,854, if it chooses to exercise its discretion fully. The difference between those two figures is £43,000 in Wigan’s favour; under the Bill, it will have capacity to raise more revenue than it will lose.

That important point very much undermines the arguments made by a number of Members. It brings a sense of reality—[Laughter.] The nature of things is that very few Members of Parliament have detailed experience of local government finance systems; they are highly dependent on the advice they receive from local authorities and their senior finance officers. If Opposition Members asked their individual local authorities how much they would be able to increase their income if they took advantage of the Bill’s proposed discounts and exemption changes, I think that, almost without exception, those Members would be substantially surprised.

In my remaining two minutes, I want to thank my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) for her comments. I welcome her back, because she has been absent from the House for some time. She has not lost her touch. She made it very clear what she thinks about the issue and has been consistent and persistent in making her point. The authorities in Dorset and Poole can, if they choose to, offset the reduction in support for council tax benefit via changes to the exemptions that they levy.

The hon. Member for Makerfield made a point about the schemes that local authorities will introduce, but I am sure that it will be obvious to her that Wigan can continue with exactly the same scheme as it has now, if it wishes to do so. If it continues with that scheme, it will not need the guidance and support that we have already issued to local authorities on all the relevant matters. Indeed, some local authorities are already carrying out public consultations on alternative schemes and will have them in place by 1 April.

[Mr Betts]

On a point of order, Mr Howarth. The Minister has not referred to the deliverability of the timetable, which is a crucial issue.

[Mr George Howarth (in the Chair)]

The hon. Gentleman is experienced enough to know that that is not a point of order.