Councils face struggle to replace Council Tax Benefit says IFS

This is according to a new report by IFS researchers.

With 5.9 million recipients, Council Tax Benefit (CTB) is more widely claimed than any other means-tested benefit or tax credit. The UK government is proposing to abolish CTB across Britain from 2013–14 and give local authorities in England, and the Scottish and Welsh governments, grants to create their own systems for rebating council tax to low-income families – though pensioners in England will have to be fully protected. These grants will be based on 90 per cent of what would have been spent on CTB in each area. A new report, funded by the Joseph Rowntree Foundation and published by the IFS, examines the likely effects of this policy and the options available to councils.

Stuart Adam, a senior research economist at the IFS co-author of the report, said: “Councils have little experience or expertise in designing means-tested support schemes and very little time to do it. The fact that they also need to make these schemes work alongside Universal Credit, which is being introduced from October 2013, makes an already difficult challenge truly formidable.”

A key finding of the report is that ‘Localisation will further the government’s aims of allowing support to vary in line with local priorities and strengthening councils’ incentives to promote employment and growth. But it will also give councils an incentive to discourage low-income families from living in the area’

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