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Polly Toynbee is wrong to oppose localising Council Tax Benefit

As Guido Fawkes has spotted there was a howler in Polly Toynbee's Guardian article which attacked the localisation of Council Tax Benefit. She said that low-income households in Haringey would lose £38 a week - but she meant £38 a year. I suppose that given she makes £115,000 a year from the Guardian alone, she might find the difference between £38 and £1,976 a year rather footling.

However, it is not just this error - the whole basis of her article is flawed. She presents the reform as an attack on the poor when it is the opposite. From next April, local councils will be responsible for administering financial help to those unable to pay their Council Tax bills. They will have to make do with 10% less funding for this compared to that currently administered centrally.

Councils will have to ensure that pensioners are protected. Indeed, pensioners may well get more help, since many don't apply for Council Tax Benefit at present even when they are entitled to it. If councils spend more on Council Tax Benefit, they will have to fund the money from elsewhere in their budget. If they spend less then they will be able to use the spare money for other things.

What this amounts to is that councils now have an incentive to do two things. First of all, each recipient they can get into work will save them money. Those on low incomes can still get some Council Tax Benefit but it quickly tapers off as incomes rise. In England the average Band D Council Tax is £1,439. Each person that switches to being in work rather than being on the dole will be paying Council Tax to the council - rather than the council effectively getting nothing from them.

Secondly, it gives a council an incentive to keep Council Tax down. If Council Tax goes up then the amount of money it has to find for Council Tax Benefit goes up. Lower Council Tax is particularly good news for the poor. That is because Council Tax hits them especially hard.  This includes those pensioners too proud to apply for Council tax benefit, and those in work who are low paid but for whom Council Tax Benefit covers none or only part of their Council Tax.

The poor, including pensioners, are especially likely to suffer from anti social behaviour and to benefit assistance of those undertaking voluntary work. I hope that local authorities will be able to remove Council Tax Benefit from people found guilty of anti social behaviour offences and to sometimes make being paid the benefit conditional on carrying out voluntary work.

Local circumstances vary and it is sensible to introduce an element of flexibility, some potential for innovation. The spending on Council Tax Benefit has doubled since 1997. These changes are due to save at least £470 million a year - before any allowance is made for councils reducing numbers on benefit. Those Labour politicians who oppose this change have not made clear what alternative savings they would find.

Some councils will be more successful than others. In Miss Toynbee's figures about Haringey, even when corrected, are based on an assumption that Haringey Council will find their 10% saving by cutting the benefits. No allowance for reducing fraud. No allowance for getting anybody into work. An assumption that Haringey Council will completely fail. That might well be true in that particular example. But she should not attack local government generally on that basis.


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