Local Government and Regeneration Committee
Meeting date: Wednesday, June 20, 2012
Official Report
283KB pdf
Local Government Finance Bill
Agenda item 5 is an oral evidence session on legislative consent memorandum LCM (S4) 12.1. The legislative consent memorandum relates to the Local Government Finance Bill, which is also under consideration by the UK Parliament.
Do you want to make some opening remarks, cabinet secretary?
If I may, convener.
I am grateful for the opportunity to explain the thinking behind the Government’s legislative consent motion on the UK Local Government Finance Bill, which the Minister for Parliamentary Business and Chief Whip lodged on 31 May. I hope that the memorandum makes our intentions clear, but I will try to address any issues that members have.
If the LCM is agreed to by Parliament, it will allow the United Kingdom Parliament to progress the issue, confer powers on the Scottish ministers and protect the most vulnerable people in Scotland. The LCM relates to a minor technical amendment, the acceptance of which will enable us to keep down the administrative costs of delivering council tax reductions to the vulnerable. Its rejection would increase those administrative costs and potentially compromise our ability to ensure that those who require reductions in their council tax bills will be able to secure them where they have no means of paying. By agreeing to the LCM, the Parliament will facilitate the Scottish Government’s ensuring that the administrative costs of operating a replacement to council tax benefit remain constrained.
The Welfare Reform Act 2012 includes provisions that create a legal gateway for Department for Work and Pensions data to be shared with local authorities, but it has become clear that a fundamental part of an individual’s assessment for the universal credit will be based on Her Majesty’s Revenue and Customs data rather than DWP data. There is no legal gateway for those data to be shared with Scottish local authorities by the DWP or HMRC.
Currently, council tax benefit can be accessed in two ways: by the passporting process through a person’s being in receipt of defined other benefits—for example, the jobseekers allowance—or by direct means-tested application to a local authority. Around 70 per cent of the claims of the approximately 564,000 current council tax benefit recipients in Scotland are passported claims; the remaining 30 per cent are non-passported standard claims. The allocation for combined housing and council tax benefit administration costs for 2012-13 was £46 million. A large majority of the costs and time involved is most likely associated with non-passported standard claims.
If the Scottish Government does not have access to the relevant HMRC income data following the introduction of the universal credit, the costs to local authorities will significantly increase, as they will have to recreate the information that has already been captured by the universal credit system. That means that, if the Scottish Parliament cannot consent to the provisions in the UK Government’s bill, the costs of administering future council tax reduction systems will substantially increase. For that reason, I hope that Parliament will support the LCM and accept the data-sharing amendment to the UK Local Government Finance Bill.
Thank you very much, cabinet secretary. I think that you have answered many of the questions that we might have had.
You mentioned administration costs increasing substantially if the LCM is not agreed to. Do you have any indication of what the increase from £46 million would be? Do you have a ballpark figure?
I would not like to begin to assess that, convener, as that would involve us getting into territory that would significantly extend the capturing of information that would normally be triggered by passported benefits. The fact that the £46 million covers non-passported housing and council tax claims, which represent 30 per cent of the claims, gives a flavour of the sum of money that might be involved.
Okay. That is helpful. The amendment is largely technical and the cabinet secretary has answered many of the questions that we might have had. Thank you very much, cabinet secretary.