The government is proposing to localise support for council tax from 2013–14, abolishing Council Tax Benefit (CTB) across Britain and giving grants to local authorities in England, and the Scottish and Welsh governments . This study examines the likely effects of this policy:
- Localisation will strengthen local authorities' incentives to promote employment and growth, but will also give them an incentive to discourage low-income families from living in the area, and a disincentive to encourage take-up of support;
- Total funding from central government is due to fall by 10 per cent;
- The government plans to give each local authority a grant based on 90 per cent of what would have been spent on CTB in that area;
- Since almost half of CTB goes to the lowest-income fifth of households, it is unsurprising that all the options analysed would hit poor households hardest.