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City takes one-off lump sum to cushion council tax blow

£1.5m Whitehall hand-out 'the right thing' to accept, says Joe

Published on January 16th 2013.


City takes one-off lump sum to cushion council tax blow

Liverpool is to take a one-off £1.5m from the Government in a bid to reduce the impact of dreaded cuts in Council Tax Benefit.

In doing so it will have to match it with another £1.7m out of its depleted council funds to cushion the blow for the most needy. 

But it still leaves a £3m shortfall which claimants and others on the lowest incomes will have to stump up.

From April 1, the current national scheme of Council Tax benefit is being abolished and a new Council Tax Support Scheme is being transferred to local government.  It means a 10 percent reduction in funding and the onus will be on cash-strapped councils to decide which of its most vulnerable citizens get what is left in the pot. 

In real terms the change means, for Liverpool, a reduction of around £6.2 million available to support those residents most in need, says the council.

Force

As it stands, next year there will be no such buffer.

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.

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

It means Liverpool 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 - this time around anyway.

Problem

Mayor Joe 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."

The city's 44,700 working age people who were set to be affected will, this year, face an 8.5 percent reduction in Council Tax, 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

From 2013-2014, A typical claimant will be required to pay an additional £1.70 per week (£88.40 pa) rather than £3.41 per week  (£177.32 pa) under the original proposal.

The Mayor addded: “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.”

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Jonathan WalkerJanuary 16th 2013.

The assault on local authority budgets by the coalition government has been one of the more under-reported and pernicious aspects of austerity. I wish the council well in choosing how to allocate their vastly reduced spending power, without inflicting unnecessary further damage upon communities...

Carl HeathJanuary 16th 2013.

I think that's an impossibility Jonathan. Like people on benefits being labelled scroungers and those in work being called strivers it is a case of divide and rule. Councils being forced to administer Cameron and Clegg's dirty work

I (don't) predict a riotJanuary 16th 2013.

Liverpool - and Manchester - have received an awful lot of Government aid in the past, much more than councils in the prosperous south-east, and rightly so. Liverpool is completely impoverished and Labour-run Manchester always knew how to play the game when Blair and Brown were in power.

If Liverpool had not had a Lib Dem power base for all those years it could have reaped similar rewards.

Now the rug has been pulled on both cities and the local politicians will be held to account. They will be told that their cities never had it so good for years, the playing field has been levelled and we are all in it together.

If the north does riot as Uncle Joe said in his letter to Cameron (it won't, it'll moan on Facebook), the Sun readers of the south will fire back with natural resentment - and then more divide and rule.

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