Implications of welfare reform for local government assessed

The Committee discusses three key areas for reform:

1. Council Tax Benefit will be abolished and replaced by localised schemes run by councils;
2. elements of the Social Fund will be localised; and
3. Housing Benefit is to be incorporated into the centralised Universal Credit system.

The Committee discusses how restrictions placed on local authorities in designing their own schemes for council tax support will produce only the illusion of local discretion. Combined with a planned 10% cut in spending on support for council tax, the MPs argue these restrictions are likely to squeeze the funds available to support working-age unemployed people.

The Committee also expresses concerns about the timetable for change, with local authorities having little time to design their council tax support schemes before they are due to be introduced in 2013.

MPs welcome plans to localise elements of the discretionary Social Fund but warn ministers that they need to fund the new schemes adequately.

The Committee also believes that incorporating the Housing Benefit into Universal Credit would be an incongruous move for an administration committed to decentralisation.

Finally, the Committee urges the Government to think carefully about the proposed system of paying housing costs support directly to tenants under Universal Credit, as this could seriously hamper the ability of social landlords to borrow to invest in their current or new properties.

Collecting information about how these funds are used would allow residents to hold local authorities to account for how effective their local schemes are.

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