Thursday, 5 July 2012

For whose benefit?

Councillor Jeremy Birch out talking to residents
I am worried about the impact changes in benefits may have on local residents and on Hastings Borough Council which plays a major part in administering them.
At the local government conference I recently attended it was a major talking point and amongst councils in East Sussex it is taking up a fair bit of our collective time.

Let’s start with what we all agree on. We all agree benefits should be paid only to those who genuinely are entitled to them – for the council currently that is the payment of housing benefit and council tax benefit.

We all agree being employed is best and as a council we are doing all we can to encourage more jobs in the town. We all agree that benefits shouldn’t be a disincentive to take up employment opportunities.

So what am I worried about?

First housing benefit: it has already been capped for larger households and for all private sector tenants, the rate is now based on the lowest 30% of rents in the area not 50% as was previously the case. From January 2012, the age at which younger people are restricted to housing benefit for a single room in a shared house rather than a one-bed flat has been raised from 25 to 35 years old. That can mean a difference of up to £30 per week.

And next year, many working age tenants in larger social housing properties will find their benefit restricted to the size of property they are deemed to need; even if it has been their family home for many years.

From October 2013 the council will no longer be responsible for processing housing benefit for new customers and by 2017 all existing customers will have transferred to universal credit. The DWP are making the assumption that the majority of claims for universal credit will be done on-line and not through face to face appointments.

However, the council will still be responsible for helping residents to reduce their council tax bills through various discounts. Currently Hastings Borough Council pays out about £11million per year in Council Tax Benefit to those people who are eligible and the government reimburses us. The system is demand led and therefore the more people who qualify, the more subsidy the government gives us.

From April 2013 this is going to change. Starting next year, the government will give the council a fixed amount based on this year’s spend less 10%. To balance the books there may have to be a cut to the amount of benefit paid out, especially as the government has ruled that older people’s council tax benefit should be protected, giving us less money to spend on the working age group.

We are working hard to look at every council tax discount (except the single persons discount which the government has ruled must not be touched) to see if that can help bridge the 10% benefit gap.

Potentially this will affect the ordinary lower income person and if their benefit goes down and they have to pay some more council tax it may affect the council’s total council tax income meaning we might have less to spend on services.

I am especially worried that the ordinary residents who are affected by all these changes don’t yet fully realise what is coming.