Council Tax will let Croydon play at social engineering

This is not a problem confined to Croydon by any means, but the council’s budget papers are usually so full of local government jargon and impenetrable Town Hall-speak that it is often difficult for people to fully understand what it is all about. Off-putting? You’d almost think they make it like that deliberately…

Let’s take Council Tax benefit localisation as an example – hardly the sort of thing many of us would seek out for a little light reading, unless we were in need of a surefire cure for insominia.

But Croydon residents ought to try to understand this, particularly as it will give every local council, including our own, the ability to target particular groups who are eligible for what has been until now an automatic benefit for the unemployed and those on low incomes.

In Croydon, the council has already put plans in place to prioritise social housing for people that work by giving extra housing points to people on low incomes, while penalising the unemployed by reducing their point scores for housing entitlement. At the time, Dudley Mead, the Conservative-controlled council’s cabinet member for housing, said: “There are lots of misconceptions about housing and the way it is allocated and this will help to tackle some of those and create a fairer system to distribute what is a valuable resource.”

Cuddly Dudley, whose own comfortable household benefits from generous allowances of around £90,000 per year paid by the council, will no doubt be crafting some similar soothing words when Croydon’s Council Tax benefit localisation proposals are announced.

According to the report that went to the Croydon Council cabinet on Monday, “As part of the Spending Review 2010, the Government announced that it intends to localise council tax benefit (CTB) from 2013-14 (1st April) with a 10% reduction in the cost of meeting these needs”.

That all sounds innocent enough. But what does it really mean?

It could be characterised as another post code lottery, with different rates of Council Tax benefit being paid to people with largely similar circumstances, just because they live in a different part of the country.

Government ministers were urged to drop the plans, with Helen Jones, the Labour party’s Communities spokesman, saying in a Commons debate, “You need to accept the scheme you are proposing is arbitrary, unfair and hits the working poor most.

“How can you possibly justify cuts of between 13 per cent and 25 per cent in benefits for people of working age and a switch from annually managed expenditure to grant, which means any increase in claims will be paid for by cuts in benefits for the poorest people?”

Croydon CEO Jon Rouse: does he have any influence on the local economy at all?

The Commons’ select committee was also critical of the proposals. In particular, this all-party group whose job it is to scrutinise such proposals took a dislining to the scheme because they saw it as offering local councils an “incentive” to get more of their residents back to work (not of itself a “bad” thing), so that they would no longer need Council Tax support. The select committee spotted the massive flaw in this thinking: the assumption that local economic circumstances are within the control of local authorities, when clearly this not the case.

You only have to look at Croydon’s vast tracts of empty office space, the undeveloped building sites and boarded-up shop fronts, and the hundreds of jobs which have been cut by Croydon Council itself in the past 18 months or so, and then consider whether the fate of the borough’s local economy really is in the hands of  council leader Mike Fisher or chief executive Jon Rouse?

The very arbitrary nature of the Council Tax benefit proposals is that they will give each local council the power to determine how it will allocate the benefit, and just to make them really think about it, central Government will give councils 10 per cent (“Hey! Let’s pluck a random figure out of the air!”) less than they currently spend.

After some lobbying, the Government was forced to make a U-turn as far as its proposals affected pensioners, who will now not be hit by the changes. But this just means that other groups will be even more vulnerable to having their Council Tax benefits reduced, if not cut altogether.

In Bradford, the local council has already had a full-blown debate with a motion highlighting the impact on poorer communities and instructing their director of finance to write a report on the implications for communities in the borough. The Conservatives on that council voted against.

In Croydon, where its reserves have reached £50 million, and are rising, the council’s 2012-2013 budget is already moving financial support away from the vulnerable. Some of the cuts in the Children’s, Families and Learners’ department will hit services to early years, children with learning difficulties, and cut the domestic violence services.

During 2010-2011, Croydon administered more than £38.5 million of Council Tax benefit. So they are already planning on receiving £3.85 million less from Government for the scheme when it is due to start in April next year – barely 12 months ahead of the next council elections.

The next passage of the council report makes for particularly chilling reading. They note that the Government wants local Council Tax benefit schemes to “support work incentives, and, in particular,  avoid disincentives to move into work”. Is this code – council-speak – for removing the benefit from the long-term unemployed?

“The Government is also clear that local authorities are expected to manage the financial risk of any local scheme,” Croydon’s report continues. “This means that should demand for council tax support increase then the cost of this stays with the local authority, this is currently estimated as an increase of £1.3m per year.

“The Council therefore needs to make a policy decision, to absorb these costs or to redesign the local scheme to reduce the level of benefits for an identified group which ensure the reduced level of central government funding is in turn passed through the new local scheme to the council tax benefit claimant.” Those are our italics, for emphasis.

“An identified group”? Who could they have in mind?

Sources in Taberner House have told Inside Croydon that the council cabinet has already been briefed (in secret, of course) on the options, by Nathan Elvery, the deputy CEO whose award-winning council finance team will be charged with coming up with those options. Some consideration ought to be given to the impact of the changes applied in neighbouring boroughs – Croydon cannot practically be more (or less) generous than Sutton or Bromley, for instance.

But there is an ultra-Thatcherite tendancy among some members of the ruling Tory group on Croydon council, who seem to think they are on a sort of holy crusade against any form of socially responsible care for the old, the infirm and the vulnerable.

Given that, the people of Croydon should stand by in the coming months for the rolling out of what may well prove to be a hideous attempt at social engineering, with those unable to find work – in many cases through no fault of their own – facing the invidious choice between going homeless or hungry in their own borough, or being shipped up north in one of Dudley Mead’s schemes to re-house poorer Londoners in Hull or Manchester.

Next, they’ll be singing “Tomorrow Belongs to Me” instead of prayers before council meetings.

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About insidecroydon

News, views and analysis about the people of Croydon, their lives and political times in the diverse and most-populated borough in London. Based in Croydon and edited by Steven Downes. To contact us, please email
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