Court to rule on council tax support schemes

Copied from LGC online
4 February, 2013 | By Mark Smulian

One has to ask if this ‘Knight In Shining Dog Collar’, isn’t picking a fight with the wrong level of government? Local government is being forced in to this position by central government. Based on the principle that everybody must pay something, government has placed the onerous task of deciding how to divvy up the council tax support budget, whilst cutting that budget by 10%.

This legal action is simply going to give the council involved an even larger hole in their budgets, unless they are able to claim back their costs from the other party. One has to ask if the complainants will put the same amount of effort in to helping these councils determine where to find the money required to fill the financial shortfall that loosing this case would create.

Two local authorities will be forced to defend their council tax support schemes in the High Court this week in the first of a string of legal-aid funded challenges by law firm Irwin Mitchell.

The first case against Haringey LBC is due to heard on Tuesday with a challenge to Sheffield City Council’s scheme due to begin on Friday. Irwin Mitchell say it has cases against Birmingham City Council, Hackney LBC and Rochdale MBC in the pipeline and warned it was “investigating several further councils”.

Sheffield cabinet member for finance and resources Bryan Lodge (Lab) said: “We will defend any proceedings because we simply have no choice but to make changes to our benefits system when we have had to make a cumulative savings of £180m over three years”.

A Haringey spokesperson said: “We took on board the views of residents, which is why those households that include claimants in receipt of certain benefits recognising significant disability have been shielded from the change.”

The string of legal challenges appear to have been initiated by Haringey residents who were put in contact with Irwin Mitchell lawyers by Paul Nicolson, a vicar who chairs the Zacchaeus 2000 Trust anti-poverty charity and Taxpayers Against Poverty, a campaigning organisation he founded last year.

He said: “I remember the poll tax in the 1990s and this is going to be worse. Taken with changes in unemployment benefits and housing benefit there will be a devastating affect on many people.”

Rev Nicolson said ministers had left local authorities too little time to devise acceptable support schemes, as defining financial hardship “requires detailed thought and there was just not enough time allowed for council to do this”.

Council tax support will be localised in April, when councils can set their own rules on who receives it but with a 10% cut in the overall budget.

Many claimants face being asked to pay council tax for the first time.

Local authorities can claim transitional relief if they limit increases for those who previously paid nothing to 8.5% of the tax level, but this is only available for one year.

A Birmingham City Council spokesperson said: “The council believes that the scheme is fair and lawful and will strongly defend any legal proceedings.”

He added that Birmingham thought its schemes differed sufficiently from others that “a finding against another authority would be binding on Birmingham”.

It rejected transitional relief because it would only defer the support scheme for a year and that “may not truly promote positive work incentives or support people back into work”.

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