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Last Updated: Monday, 9 July 2007, 23:15 GMT 00:15 UK
Funding cut 'will affect poorest'
Council tax bill
The LGA is concerned at the lack of take-up of benefits
Proposed cuts to the Council Tax benefits service will hit the poorest hard, council leaders have warned.

The Department for Work and Pensions (DWP) has told councils there will be a 5% cut in real terms for the service.

The Local Government Association (LGA) fears this could result in a slower service and more of the poorest people in society not claiming their benefits.

The LGA said the cuts would result in either a reduced benefits service or "substantial increases in council tax".

Unclaimed benefits

LGA vice chairman Sir Jeremy Beecham described the proposed funding cut as "unreasonable and unfair".

He said: "Council tax benefit is failing those it is designed to help.

"If the government's proposals are implemented, it will result in a total real terms loss of almost 300m in subsidy grant over five years."

He added: "If the proposed cuts are implemented, this will result in a major reduction in the benefit service or substantial increases in council tax levels if current levels of service to the customers are to be maintained."

The LGA said an estimated 1.8bn of council tax benefits are left unclaimed every year.

With just two thirds of eligible people, especially pensioners, claiming their benefit entitlement and take up down by up to 10% since 1997, council leaders warned those figures could get even worse.


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