The axe is hovering over the £4.2bn council tax benefit bill. The details are patchy, but I’m hearing speculation that it could be cut by as much as 10 per cent. If it doesn’t emerge as one of George Osborne’s welfare savings today, it was certainly one he closely considered.
A cut is likely to involve some complex changes to some eligibility rules that are already incredibly complex. The rebate is currently paid to people on low incomes: lone parents, jobseekers and around 3.5m over-65s who are mostly on pension credit. But it is impossible to neatly sum up the criteria.
Local authorities may also be given some more freedom on how the cut is enforced. But where cuts are concerned this freedom can be another word for blame. At present councils are responsible for paying out the benefit on behalf of the department for work and pensions. Now they may be given the additional burden of deciding how the pain is allocated.
Either way, it would mark a big shake-up of a benefit that is extremely poorly administered. As few as 63 per cent of those eligible for this benefit actually bothered to claim it last year. Given this is intended for people right at the bottom of the income scale, the low take-up rate is quite a remarkable statistic.
Whatever happens this afternoon, I doubt it is intended to encourage more people to claim. After all, how could you be sure of still making a saving?
Jim Pickard
Kiran Stacey