Local Government Finance Bill

Lord Colwyn Excerpts

Monday 16th July 2012 Grand Committee

[The Deputy Chairman of Committees (Lord Colwyn)]

My Lords, should there be a Division while we are sitting, we will adjourn for 10 minutes.

Clause 9 : Council tax reduction schemes

Amendment 72

Moved by

--- Later in debate ---

[Lord Colwyn]

My Lords, I think everyone has returned. Shall we continue with the noble Lord, Lord McKenzie?

[Lord McKenzie of Luton]

My Lords, I was explaining that to have to do this in short order at a time of considerable turbulence—when staffing levels are under pressure, budgets are being cut, and systemic and organisational changes due to housing benefit being rolled into universal credit are being contemplated—is simply unreasonable. At this point, perhaps I should refer to the report of the Local Government Chronicle from 16 February this year. It says:

“More suppliers have joined in the criticism of the government’s welfare reform timetable that risks leaving councils to foot the entire bill for a £480m gap in council tax benefit funding. With Capita having already labelled next year’s deadline ‘impossible’, other suppliers have confirmed they have raised the issue with the Department for Communities and Local Government. As previously reported by LGC, Capita wrote to more than 150 customers in January telling them: ‘It will not be possible to put new systems in place by March 2013, when councils are due to set up their own council tax benefit schemes incorporating a 10% cut in funding’”.

If local authorities are to fulfil the task of taking account of local factors, and in particular to deliver positive work incentives in drawing up a draft scheme, they must know the detail of the universal credit, which will come into existence in 2013. This is especially so given the need for consultation. The statement of intent requires a billing authority to consult any major precepting authority that has the power to issue a precept to it, then to publish a draft scheme, and then to consult such other persons as are likely to have an interest in the operation of the scheme.

What is the latest time at which the Government think that consultation can proceed under these provisions? As for major precepting authorities, it has yet to be determined how funding is to be allocated between the tiers. Although the final say is with the billing authorities, any disagreement on the draft at this point might have considerable impact on the timing of the publication of a draft scheme. Those others who are likely to have an interest in the operation of the scheme could be a very wide group of people.

We discussed last week that it should certainly include local precepting authorities, which will bear part of the cost. When the Government have felt fit to remind local authorities of their responsibilities under the Equality Act 2010, making it clear that they will have to consider how a scheme might affect people who share a relevant protective characteristic, they will certainly need to consider the impact of their scheme on disabled people.

Local authorities have a specific duty under the Child Poverty Act to work with local partners to reduce and mitigate the effects of child poverty. They will be required to take into account their local child poverty needs assessment in designing and developing localised schemes. They will also need to have regard to the position of those at risk of becoming homeless. The statement of intent makes it abundantly clear that inadequate consultation could lead to judicial review, a matter to which we will return shortly.

The Government know that they are putting local government in an extremely difficult position by this timetable. That is why they are validating consultation commenced before the passing of the Act and why they are implicitly encouraging a consultation period of less than the 12 weeks encouraged by the code. This simply will not do. The statement is clear about the prescribed pension credit age scheme, and the Government have been clear that, in developing local council tax reduction schemes, vulnerable groups should be protected. They declined to define further “vulnerable groups”, but we will press them on that later.

Vulnerable groups should be protected and are clearly entitled to be consulted in a meaningful way. The Government are offering or insisting on one they made earlier, in the form of a default scheme. This is designed to be equivalent to existing arrangements. Of course, for those tempted to take this up or who are left with no practical option but to do so, that comes at a cost, because they will have to find the 10% cut in funding. Those who cannot live with the default system are encouraged to adopt a system using the same factors as present, as that would reduce the amount of time and expense in changing the IT systems. That is hardly a principled base on which to build a council tax benefit system.

If local authorities are to play the part required of them, whether we agree with it or not, it must surely be right for them to be given time to do the job properly. We are well aware that councils are working hard to meet the exceptional challenges that this legislation brings. Local government has a strong history of delivering the near impossible, but the timetable must be judged not by the pace of the quickest and the best resourced—those who have a ready pool of extra resources from second homes and empty properties—but surely by the least well resourced, who run the risk of having the default scheme imposed with the 10%-plus hit on services.

We are aware that there is a view that if there is to be a year’s deferral, the Government will extract their 10% by some other means. The Government seem to be adept at finding money here or there for a waste collection scheme or change in fuel duty. However, this is fundamentally about fairness; the Government are asking a lot of local authorities. A chance to do the job properly in the interests of the poorest and most disadvantaged is not unreasonable. I beg to move.