The coalition government has announced new funding of £100 million to support 'best practice' in localised council tax benefit schemes.

In its 2010 spending review, the government announced plans to make local councils in England responsible for council tax rebate schemes – at the same time as cutting the available budget for them by 10 per cent.

The government has now told MPs a grant will be available for schemes designed so that:

• Those who would have been on 100 per cent support under existing council tax benefit arrangements pay no more than 8.5 per cent of their council tax liability.
• The taper rate does not increase above 25 per cent.
• There is no sharp reduction in support for those entering work – for claimants previously entitled to less than 100 per cent support, the taper will be applied to an amount at least equal to their maximum eligible award.

The government says the money is designed to 'assist the transition process' – while at the same time signalling concerns over big losses for some groups of people, and problems with collection. The body representing local authority finance chiefs called the announcement 'a huge, confusing U-turn'.

Source: Written Ministerial Statement 16 October 2012, columns 13-14WS, House of Commons Hansard, TSO
Links: Hansard | CIPFA press release | Public Finance report