Benefitting the “rich” …

The battlelines have been drawn today both locally and nationally on the same issue – how to deal with the issue of benefits. This is one of those rare issues in politics where everyone feels passionately and is absolutely convinced that they are on the right side of the argument.

If I was an MP in Parliament today, I would have had absolutely no hesitation in voting against the 1% cap in benefits. However, that aspect is covered at length by other national bloggers so I am going to focus instead on the local impact in Surrey Heath and tonight, we were discussing changes to Council Tax benefit.

For those who aren’t aware, there are 3440 Council Tax benefit claimants in Surrey Heath – (yes, even here in one of the richest parts of the country) which means that the Government basically pays for their Council Tax. However, the Govt decided to make an arbitrary cut of around 10% in the grant they would give to Councils and then force Councils to make up their own scheme for the shortfall. This crackpot idea has been heavily criticised throughout local government (such as the Local Government Association) regardless of political party for the reasons which will become obvious in a moment.

Now in Surrey Heath, 1568 of these claimants are pensioners who the Govt said must not be affected. However, what this means is that the remaining 1872 claimants will be the ones making up the shortfall for them and the pensioners as well.

Of these 1872, we know that:-

313 are single parents
583 are in work
203 are couples with children
28 have severe disabilities
138 have long term disabilities
12 have a disabled child

Our officers estimate that between 23% and 48% of the 1872 households will include someone with a disability.

Now I must start by saying that the above situation to this point is not Surrey Heath’s fault at all – on this occasion, it should be recognised that it is Mr Pickles who appears to have ignored all of the advice given to him including by independent and cross-party groups about the impact that this will cause. He has in effect passed off responsibility and forced councils to make their own decisions which will have devastating impacts on the lives of affected residents.

Now tonight’s Executive had basically 4 options to recommend to Full Council which were:-

1) Continue as now – Council Taxpayers in Surrey Heath would then foot the difference and claimants receive same levels. A transitional grant for 1 yr only would be given so total cost would be £71k (about £1.70 per Council Taxpayer a year)

2) Implement a Surreywide Framework which changes various criteria (e.g limit the maximum to Band D only) – grant not payable – total cost of £82k.

3) Implement national Govt scheme (with 1 yr transitional grant) which involves no claimant paying more than 8.5% of their bill – total cost of £78k.

4) Force the 1852 claimants who are not pensioners to make up entire shortfall themselves. Total cost of £30k. (due to collection costs and hardship funds)

Guess what? The Conservatives on the Executive have decided to recommend Option 4. This is the option that is actually 4 times worse than even Eric Pickles is recommending as it means that claimants have to pay 30% rather than the 8.5% on his scheme.

Now some people might mistakenly think that this is a fantastic idea and about time that we clamped down on these so-called scroungers. Unfortunately, this is a complete myth and the reality is something I know about as the highest number of claimants are in my own ward of Old Dean.

Here is a typical example of the problems that will now arise. It is not based on an actual case but it is not difficult to find one like this as all of these would have their own story.

Let’s imagine a family living in Camberley in a Band D property. Both parents did have good jobs and are of working age but one currently has a low paid job following a redundancy and the other is either working part time or has a disability. They are therefore in full receipt of Council Tax benefit at this time and therefore pay nothing on a bill that would otherwise be about £1500.

If the current Surrey Heath proposals go through, this family who are already struggling financially and probably already in heavy debt and perhaps reliant on other family members or charity for support will now have to find an unexpected £450 a year. Put simply, they will not be able to pay this. There are not many people I know in this area with a spare £450 lying around down a sofa.

So what happens next, well Surrey Heath has decided to set up a Hardship Fund but currently only proposing that this has £10000. This would only therefore cover about 30 households out
of the 1872 so at this stage, totally insufficient.

So after that, we will still have about 1840 affected households. If they can’t pay, what then? Well, luckily Surrey Heath has decided to allocate an additional £15k for extra collection and recovery costs in chasing up these people in the hopeless belief that they will somehow magically turn up with this money. So now, we are down to £50k difference of public money even on the most optimistic figures.

The reality as anyone knows who lives or works in poorer communities or with a simple understanding is that the only people who will benefit from all this are loan sharks. The household will suffer by getting into more debt with more legal fees and impacting on their health. They then need more support from more agencies and charities and end up with even more complex needs – a typical vicious declining circle.

Council taxpayers lose out as well because our officers will have to spend more of our time and public money chasing more people with growing debts. Even if court orders are granted, bailiffs would have little or nothing to take from these households so we end up with higher levels of debt which will get written off anyway and higher levels of homelessness (already rising). This supposed £50k saving will in fact be nothing of the sort and actually turn out into a very large bill instead.

A final decision on this scheme will be made at Full Council on 22nd Jan – I will be opposing this and hoping that the local Conservatives see sense in the next 2 weeks by choosing one of the other options. Bearing in mind tonight’s lack of interest from them in discussing the issues, I am not hopeful….


2 thoughts on “Benefitting the “rich” …

  1. leftoflightwater

    Reblogged this on leftoflightwater and commented:
    Last night saw an important session of the Surrey Heath Executive, who voted on the introduction of changes in council tax benefit. Here SH Labour Group leader Rodney Bates describes what happened last night, and the implications for the borough and its less fortunate residents.

  2. Matt

    Interesting post but it doesn’t surprise me. I suspect that it is less about the rich and more about Tory voters. They are doing their usual trick of making sure Conservative voters aren’t affected. People who get Council Tax benefit aren’t likely to vote for the Tories so the councilors attitude seems to be to sod them.


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