Devolving Council Tax support in 2013-14 has massively increased
the amount of social security now being administered locally in
England. But this change has caused acute and often arbitrary
hardship for vulnerable families – illustrating the perils of
passing responsibility for deep spending cuts onto local
authorities – according to new research published today
(Thursday).
The localisation era – part of the Nuffield
Foundation-funded Safety Nets project – analyses trends
in localised social security over time and assesses whether the
rise of localised social security support has helped or hindered
families' living standards.
By far the biggest area of localised social security has been the
replacement of the nationally administered Council Tax Benefit
(CTB) with the locally administered Council Tax Reduction (CTR)
for working-age families in England from 2013-14. CTR now
accounts for two-thirds of all localised welfare support and will
cost £4.1 billion in 2025-26.
However, this has not been a simple devolution exercise as it has
been accompanied by significant funding cuts. Overall spending on
support for Council Tax in England has fallen by 31 per cent –
£1.9 billion in real-terms – since CTR was introduced. The number
of families receiving support fell from 5.9 million in 2012-13 to
3.7 million in 2024-25.
Seven-in-ten local authorities across England offer less support
compared to the old CTB, and in some areas support has been cut
by half. Less-generous schemes correlate with higher levels of
deprivation and lower financial resilience – suggesting
localisation has weakened support for those most likely to
struggle paying Council Tax. Less generous schemes are also more
likely to be found in local authorities under Conservative
control than those controlled by other parties.
This has led to large variation in the generosity of support
across local authorities in England. A family living in a Band D
property and receiving the maximum level of CTR in Doncaster
would pay no Council Tax this year. If, however, they moved a few
miles across the border to North Lincolnshire, they would have to
pay nearly £1,400.
The report says that the mess of Council Tax Reduction highlights
the perils of doing spending cuts alongside localisation. CTR
should be re-centralised to level out support across England (and
equalise support between England, Scotland and Wales) and reduce
the administrative burden on local authorities.
The localisation era finds that there may be more logic
for localisation of other forms of social security support, such
as crisis support which has been delivered by successive rounds
of the Household Support Fund, first introduced in 2021.
In the case of the multi-year Crisis and Resilience Fund, which
replaces the Household Support Fund next year, the efficacy of
support is based on its funding being ring-fenced by central
government (and throughout the Spending Review period), while
local authorities have genuine discretion about how to deliver
it.
Alex Clegg, Economist at the Resolution Foundation,
said:
“Britain's social security system is highly centralised, but in
England locally delivered support has been massively increased by
the devolution of Council Tax support.
“However, local authorities were given responsibilities for
providing Council Tax Reduction at the same time as their overall
budgets were slashed. This created huge pressure to cut support
and has caused acute, and often arbitrary, hardship for
vulnerable families, who now face stark variation in their
Council Tax bills depending on where they live. It is time to
abandon this reform and re-centralise support.
Ruth Patrick, Professor in Social and Public
Policy at the University of Glasgow, who leads the Safety
Nets project, said:
“Localised support is often used as a panacea for shortcomings in
our national social security system, but the overall spend is
just a tiny fraction of the working-age welfare budget. This
often leaves councils avoiding advertising the schemes they do
run, for fear that the demand and level of unmet need will
quickly overwhelm what is only a very modest amount of help
available.
“As the Government prepares to roll-out the Crisis and Resilience
Fund next year we need to consider how and why social security is
devolved within the UK, and recognise both the possibilities and
risks that come with the localisation of essential forms of
support.”
Notes to Editors
- A number of families affected by changes to Council Tax
Reduction are happy to speak to the media about their
experiences. For more information speak to from Glasgow University
on 07947 357 882.
-
Safety Nets: social security for families in a devolved
UK is a major Nuffield Foundation-funded project featuring
researchers from seven UK universities, the Resolution
Foundation and Child Poverty Action Group, exploring
the devolution and localisation of social
security within the UK, and the realities, risks, and
opportunities this poses for families with dependent
children. See https://safetynets.study/
for more information.
