1 Introduction
1. The Government has set in train a major overhaul
of the welfare reform system. In November 2010 the Department
for Work and Pensions (DWP) published a White Paper, Universal
Credit: welfare that works, which set out the Government's
plans for a 'Universal Credit' (UC) to replace most in-work and
out of-work benefits for people of working age.[1]
The intention is to introduce the Universal Credit for new claims
from October 2013, with the aim of completing the transfer of
all existing claimants to the new system by October 2017. A Welfare
Reform Bill was introduced to Parliament in February 2011 to give
effect to these changes.
2. Housing Benefit and Council Tax Benefit—both
currently administered by unitary and lower-tier local authorities—would
effectively be abolished by the introduction of the Universal
Credit, which will include a housing costs component. The Government's
intention to 'localise' Council Tax Benefit had previously been
announced in the October 2010 Spending Review, along with a commitment
to reduce spending on support for council tax by 10%, or £490
million each year. Also to be abolished were the discretionary
elements of the Social Fund, to be replaced by local schemes run
by councils.
3. Our colleagues on the Work and Pensions Committee
held a short inquiry into the Universal Credit in January and
February 2011.[2] In its
passage through the House, the Welfare Reform Bill has been subject
to line-by-line scrutiny in committee. However, we felt that there
remained scope for our committee to examine the welfare reform
proposals from the perspective of localism and local government.
The localisation of Council Tax Benefit and elements of the Social
Fund on the one hand, and the centralisation of Housing Benefit
on the other, will clearly have financial and administrative implications
for those councils who are gaining or losing responsibilities.
In the light of our recent inquiry into the Government's localism
and decentralisation agenda, we also wished to explore to what
extent local authorities would be given the necessary flexibility
and support to make a success of these changes. The reforms also
entail changes to the responsibilities of the Department of Communities
and Local Government, and we have been interested to observe this
as an example of policy-making which demands close collaboration
between DCLG and the Department for Work and Pensions.
4. We received twenty-one submissions of written
evidence on this topic and held one oral evidence session, in
July 2011. We are very grateful to all those who participated
and provided memoranda. In August 2011 the Government published
its consultation paper on localising support for council tax,
and we have endeavoured to take this into account in the preparation
of our report; the consultation closes in October. In
addition to its formal response to our report, DCLG should take
into account the chapter about council tax support when collating
responses to its consultation on that subject.
1 Department for Work & Pensions, Universal
Credit: welfare that works, Cm 7957, November 2010 Back
2
Work & Pensions Committee, White Paper on Universal Credit:
oral and written evidence, March 2011, HC 743 Back
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