Universal Credit would be better delivery vehicle for energy bills support

By Deven Ghelani | 17 February 2022

On 3 February the Government announced a range of measures to help mitigate the impact of energy price increases. 

As part of this, a £150 council tax rebate for households living in property bands A to D was announced. In addition, £144m will be provided to support vulnerable people and those on low incomes who do not pay council tax, or who pay council tax for properties in bands E to H.

Local authorities are expected to use bank account details to credit accounts with a one-off payment of £150. For households in bands A to D who do not pay by direct debit, their councils must be ready to process their claims in April. 

Policy in Practice works with local authorities to design council support schemes and increase access to benefits. Councils have shown incredible resilience and innovation in administering a range of complex support schemes, some of which were amended after introduction, since the pandemic began. But this is the sixth scheme they have been asked to deliver. 

Each of these schemes incurs setup costs and requires the council to identify eligible households to target with information to encourage take-up. 

Detailed guidance has yet to be provided for this latest scheme but we know that councils will need the bank details of households who don’t pay their council tax by direct debit. An added complication is that, in some authorities, more than half of bill payers don’t pay via direct debit so they will need to apply for the rebate, creating administration and affecting take up.

Our analysis of the similar Coronavirus Hardship Fund for the GLA suggests that many residents will still be faced with rising costs, including a significant council tax bill. 

A better alternative delivery mechanism is available. Universal Credit has the data on those likely to need the support, and would be a more effective way to target the £150 to households that need it. The money could also have gone to councils directly, to fund council tax support and discretionary support. 

Many of the councils we work with are helping people with the cost of living by seeing if they are eligible for any of the £16 billion of unclaimed benefits, as well as better targeting local support including free school meals, Healthy Start vouchers, council tax support, Discretionary Housing Payments, local welfare assistance and the Warm Homes Discount.

Deven Ghelani is founder of Policy in Practice

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Council Tax Fuel poverty Universal Credit inequality