Newport could face 500k council tax benefit bill (From South Wales Argus)

Newport could face 500k council tax benefit bill

12:10pm Saturday 26th January 2013 in News By David Deans - Politics reporter

CHANGES to council tax benefit in Wales could see Newport facing a bill for half a million pounds.

A new system for council tax benefit means from April councils will pay out the benefit from a fixed grant that doesn't account for tax rises or whether the number of claimants grows.

Last week Welsh Government ministers announced that all council tax benefits claimants will continue to get their entitlement after £22 million was found to plug a funding gap from London.

But the money provided does not necessarily cover the entire benefit bill, which was previously simply paid for by central government.

City council leader Bob Bright said in Newport this shortfall could be as much as half a million pounds in 2013/14.

Councillor Bright said: "This represents a considerable risk to the financial stability of councils in Wales."

Cllr Bright also told the meeting that the scheme announced relates to 2013 and no announcement has been made on future years or on funding in 2014 and beyond.

Cllr Mark Whitcutt, cabinet member for human resources and assets, told the Argus the situation was the direct result of UK government cut backs, although Tory leader Matthew Evans said the blame was in the hands of the Welsh Government.

The gap in funding is accounted for in the Newport 2013/14 draft budget.

Newport estimates it will get £10 million but its current council tax benefit bill is already £10.16 million.

Currently the cost of council tax benefit was simply claimed back from the Department of Work and Pensions, rather than provided through a grant.

A Welsh Government spokeswoman said the grant of £22 million significantly improved the financial position of vulnerable households and local authorities, who before the regulations were passed were facing a large fall in collection rates.

The UK Government has changed how it manages council tax benefit, devolving it to Wales with a ten per cent budget cut.

Until the Welsh Government announced the additional grant, claimants that don't pay council tax were due to pay some for the first time.

Councils must approve any benefits changes before January 31, otherwise a default scheme would be imposed and the council would lose its ability to exercise limited discretionary powers.

  Welsh councils could face multi-million shortfall   COUNCILS across Wales could face a shortfall in funding council tax benefit of between £5 million and £10 million.

That's according to the Welsh Local Government Association, which said that because the amount supplied for council tax support is fixed, it may not take into account changes in the number of people that claim.

However it welcomed the news of the Welsh Government's decision to fill the funding gap.

A WLGA spokeswoman said: "On the basis of the current take-up the WLGA has calculated that there is a potential shortfall of between £5m and £10m."

Blaenau Gwent and Torfaen councils both told the Argus it was difficult to estimate the financial risk of the change, while Monmouthshire council said it does not yet know whether its gap in funding is met.