Q&A: Council tax benefit scheme
- 5 December 2012
- From the section Wales
Today assembly members will vote on whether to rush through plans for a new council tax benefit scheme which will affect 330,000 households in Wales.
The plans are at the centre of a political controversy after the Welsh government claimed the Treasury withheld key financial information from it until after the Autumn Statement. This means the plans cannot have the usual scrutiny from the assembly.
The opposition parties say ministers have been deliberately dragging their feet in order to provoke a confrontation with Westminster - and that councils in England already have their schemes ready to go.
What is the root of this controversy?
This goes back to the Treasury's decision that the benefit system, which gives lower income households additional help to pay their council tax bills, should be devolved to local councils rather than run at a UK level. The change has been in the pipeline for a couple of years and will come into force in April 2013. As local government is devolved to Wales, the assembly must pass regulations to enable each of the 22 councils to bring in schemes ahead of this date - and these regulations are at the root of the current controversy.
Why have not the regulations been passed by the assembly yet?
In devolving Council Tax Benefit (CTB) the Treasury is passing on the responsibility for the scheme - but not all the money to pay for it. Current estimates are that there will be a shortfall of around 10% - which the Welsh government says it cannot afford to make up out of its existing budgets. So that cut will be passed on to residents. However, it will not be clear until after the Autumn Statement exactly how large the cut will be. Ministers in Cardiff Bay say they have made repeated attempts to get the figures from the Treasury because, they say, without them, they cannot lay the regulations in front of the assembly - so Welsh councils are left in limbo. The Autumn Statement coincides with the last full meeting of the assembly before Christmas - which is why the government says it has to rush the regulations through as the last item before the festive break.
Will they pass?
The opposition parties, particularly Plaid Cymru and the Welsh Liberal Democrats, have been scathing about the last minute rush to pass the regulations. They say that ministers have had ample opportunity to pass the regulations without needing to wait for the Treasury to release the final funding figures. The accusation is that the Welsh government has been looking to pick a fight when it could have got the schemes underway in plenty of time. They point to many councils in England which have pushed ahead and got their schemes ready to go.
Local Government Minister Carl Sargeant has strongly denied the claims but both parties may decide to vote against the plans on the grounds that they have not had sufficient scrutiny. The Conservatives are still considering whether to back the plans today.
How much money are we talking about here?
A substantial amount. During this financial year, the cost of CTB in Welsh councils was approximately £252m. A 10% reduction in this would mean a cut to around £226m - but the most recent figures from the Treasury indicate it could be even lower at around £215m. The Welsh government says it does not have the money to make up the shortfall and it will therefore have to be passed on to council tax payers. In Scotland, the government there has said it will fill the gap in funding from Westminster.