Let’s take the ‘bribe’ to ease pain of cuts

LETTERS have gone out this week to 1,650 working age households in the social rented sector in Hartlepool, warning people of the Government cuts to their housing benefit from the April 1.

The new rules indicate that if you have one or more surplus bedrooms your Housing Benefit is likely to be reduced.

The amount allowed for rent and any service charges will be reduced by 14 per cent if you have one extra bedroom or 25 per cent if you have two or more extra bedrooms.

The new rules state that a bedroom is required for each of the following:

l A couple;

l A single person over the age of 16 years;

l Two children, of opposite sex (i.e. boy & girl) under the age of 10;

l Two children of the same sex under the age of 16 or a single child under the age of 16;

l An overnight carer, where required.

This will leave as lot of people facing a big cut in their housing benefit and despite numerous warnings that these changes are coming, I’m sure that the realisation will start over the next few weeks.

Pensioners will be protected from these cuts under the Governments rules so they will not face any changes. If you receive one of these letters, please contact your housing provider to make any necessary arrangements and to get advice.

Cuts in housing benefits are just one of a number of welfare changes being implemented on April 1 and there will be a large number of households affected by more than one of these cuts.

The council and our partners are gearing up to offer help and advice to those affected but we will not have enough resources to cover the extent of the cuts.

In early February, letters will be going to households affected by the cuts to council tax benefit. Many people are going to have to pay a level of council tax for the first time and many others will be facing a larger payment than usual. You may think that this will be advantageous to the council as we will be getting more money in than usual to spend on services. Sadly, the reality is quite the opposite.

The Government previously administered the council tax benefits system at a national level and gave us the £11m to cover the money we would get in if everyone paid full council tax.

They are now shifting the administration down to a local level and only funding us for £9.9m. Again pensioners are protected so it manifests itself in a 20 per cent cut in council tax benefit to working age households.

The council cannot afford to absorb these cuts as we already have to find £20m of cuts ourselves so we have no choice but to pass it on to the recipient.

Through some excellent financial management in Hartlepool, we have managed to find some funding to help soften the blow for residents and we are proposing to taper the cut.

This will mean an 8.5 per cent cut in council tax benefit from April, followed by 15 per cent next year and then up to the 20 per cent in year three.

It’s not much but in the circumstances, we feel it goes a small way to helping people better manage and prepare for these cuts.

It’s true to say that we don’t know exactly how these welfare reforms or benefit cuts are going to affect the town and particularly the council’s overall budget position.

I think our collection rates will be hit quite hard as more and more people will find it difficult to pay their council tax bill.

The Government is once again offering its bribe to councils to freeze council tax levels next year.

It puts councils in a “no win” situation whereby if they take it, it stores up a financial problem further down the line which will ultimately hit frontline services, in our case £400k in 2015.

If they don’t take it, they can put up the council tax by a maximum of two per cent which helps the future finances slightly but is hugely unpopular with the public.

Last year, Hartlepool was the only council in the Tees Valley that took the Government grant and froze Council tax.

Despite the well documented shenanigans over last year’s budget setting process, I seem to remember that every councillor unanimously backed the proposal to freeze council tax.

The arguments were well articulated from all sides and spoke about helping to keep a few extra pence in the public’s pockets during these very difficult economic times and that the council should be doing all it can to help residents until things get better so if the Government is offering a grant, let’s take it.

Things haven’t got better since last year. In fact they are considerably worse and will continue to decline as these further cuts start to bite.

This is why I will be proposing that we take the Government grant once again and freeze Council tax for a third year.

When there is so much uncertainty around the full effects of the welfare reforms, I feel it would be almost self defeating to raise council tax by two per cent when there will be hundreds having to find some money to pay it for the first time.

Let us wait and see how our collection levels are affected before we go and try to squeeze more money out of people.

Let’s wait and see how the most vulnerable people in our society are affected by these Government cuts and use our resource to try and support those before we start thinking of how much we might have in 2015.

Setting council tax is never an easy decision for Councillors or the cabinet.

We listened to the arguments last year and took the freeze.

Things have only changed for the worse for residents in Hartlepool so I hope the fact we had an all-out election last May was not the sole motivation for freezing the council tax last year and that councillors agree we should be doing all we can to ease the financial burden on our residents again this year by going by taking the Government’s bribe and not increasing council tax.