Mayor acts to mitigate council tax benefit cuts

Terraced houses

Liverpool is to significantly reduce the impact of a Government reduction in Council Tax Benefit.

From 1st April 2013, the current national scheme of Council Tax benefit is being abolished and a new Council Tax Support Scheme is being transferred to local government. This carries a 10 percent reduction in funding compared to the current arrangements.

In real terms this means for Liverpool a reduction of around £6.2 million available to support those residents most in need.

It is part of a wider set of welfare reform changes that will directly affect people’s lives and the places where they live, as well as impacting on a proportion of people who are in work.

Mayor Joe Anderson is to recommend to Council not to passport on the full impact of these financial reductions.

It means the City Council will accept the government’s one off Transition grant of £1.5 million and will match this with £1.7 million to ensure that Liverpool residents do not feel the full force of the cuts.

The 44,700 working age people who were set to be affected will only face an 8.5 percent reduction, rather than the 17.5 percent originally proposed. Pensioners are exempt from any cuts, which means the reduction has to be found from a smaller amount of people.

A typical claimant will be required to pay an additional £1.70 per week, rather than £3.41 under the original proposal.

Mayor Anderson said: “I have been thinking long and hard about whether or not to accept the Government grant.

“It is only for one year and does not solve the problem in the long term. We will have to see what Government announces for 2014/15 and of course examine our own financial position. This is as much as we can do given our current financial position.

“After grappling with this issue for several weeks, I have concluded that it is the right thing to do to take the money in order to offset the impact on the most vulnerable people in the city.”