The Institute for Fiscal Studies has published a report, Reforming Council Tax Benefit, which reviews the Government’s plan to localise Council Tax Benefit: ‘Universal Credit is intended to simplify the benefit system by reducing the number of different benefits that claimants and administrators must contend with. Keeping council tax support (the means-tested benefit with the largest number of recipients) separate – and indeed allowing it to vary across the country – severely undermines this simplification. Universal Credit is also intended to rationalise work incentives by replacing a jumble of overlapping means tests with a single one, ensuring that overall effective tax rates cannot rise too high. Again, separate means tests for council tax support could undermine this, with the potential to reintroduce some of the extremely weak work incentives that Universal Credit was supposed to eliminate. It is difficult to think of reasons why the government’s original plan to integrate CTB into Universal Credit was inferior to what is now being proposed’ (pp.8-9). ‘Achieving coherence between council tax rebates and Universal Credit is complex. The need to make the new rebates fit with Universal Credit makes local authorities’ task of designing schemes, already a difficult challenge given the tight timescale, into a truly formidable one. There is nothing in the Universal Credit system that will make it straightforward to identify those who should be passported onto a full council tax rebate. That could make running a council tax rebate scheme based closely on the current system extremely challenging for local authorities … the advantages of localisation seem to be strongly outweighed by the disadvantages, particularly in the context of the welcome introduction of Universal Credit’. (p.107)
