Local Government Finance Bill

Debate between Nick Raynsford and Annette Brooke

Tuesday 31st January 2012 Commons Chamber

[Annette Brooke (Mid Dorset and North Poole) (LD)]

It is a pleasure to serve under your chairmanship, Mr Crausby.

On the first string of amendments, we are focusing on the 10% cut, which leads to all the other problems identified in subsequent strings. I accept that in addition to the 10% cut there are unexpected changes in the number of claimants and that apparently there is no cushion for that situation. Although I do not support the amendments that have been put forward, it is important to flag up the problems, which must not be ignored.

Let us consider the situation for a council faced with setting up a new system. Any savings it will be able to make through localisation of council tax benefit will need to be offset against the administrative costs it will incur. I accept that there must be some savings, because otherwise there would not be the same need for external audit when money is sent to the council to cover payments, but will the Minister state explicitly where the money will come from for the inevitably large cost of setting up individual schemes, particularly in the first year. There is of course the possibility that councils will work together, which would reduce the administrative costs of setting up new schemes, but they would then lose the advantage of localisation, because even an adjoining local authority will have a different demographic make-up. As soon as we focus on the 10% cut, we think about the demographic make-up.

I share some of the concerns that have been raised across the House. Once we ring-fence pensioners—we probably all agree that they should be protected—we effectively put a gearing effect on everyone else. By the time we have picked out families with a disabled member and other vulnerable groups, the reduction in council tax benefit, which might have started as an average of £2 a week, will start escalating on the backs of just a few people to £6, then £10, all depending on the make-up of the local authority area.

[Mr Raynsford]

I am finding it a little difficult to reconcile most of the hon. Lady’s speech and, in particular, her point about the impact of the 10% cut, which she clearly sees as damaging, with her earlier statement that she cannot support the proposed changes. Amendment 79 would quite simply allow the scheme to start on a revenue-neutral basis without the 10% cut, so what objection can she possibly have to it?