Scottish council election: Deal over tax benefit

The Scottish government deal was struck with council body Cosla

The Scottish government has announced it is funding a £40m "shortfall" in council tax benefit, after accusing UK ministers of unfairly cutting it.

The one-year deal, backed by local government body Cosla, came two weeks before the 3 May council elections.

SNP ministers said the deal would help protect vulnerable people.

Labour and the Lib Dems questioned if it could be paid for. Prime Minister David Cameron said it was an example of devolved power working efficiently.

The UK government will abolish the existing council tax benefit in April 2013 under welfare reforms, and cut the budget of its replacement by 10%.

Responsibility for its successor scheme will be devolved to the UK's regions and nations, which includes Scotland.

The Scottish government said it would put up £23m of funding to plug the benefits hole in 2013-14, with Cosla providing £17m.

Local Government Minister Derek Mackay, said: "558,000 people in Scotland on the lowest incomes currently receive council tax benefit, including the unemployed, pensioners, those who cannot work because of disability, carers and people who receive tax credits.

<bold>Spending 'black hole'</bold>

"We will not allow them to be victims of UK cuts - we will work to protect them."

Cosla president Pat Watters added: "In taking this decisive action to cover the cost of council tax benefit, together with the Scottish government, we will once again be protecting the most vulnerable in society."

The UK government said its reforms would make for a fairer system, where hard working families and pensioners were not left to pick up a spiralling benefits bill and where "hard work always paid".

On a visit to Scotland, Mr Cameron said: "The public need to know that the Westminster government, the United Kingdom government, is dealing with our debt, dealing with our deficit, making sure that we can pay our bills, keeping our credit rating, keeping interest rates low.

"Now one of the cuts we made was to the overall level of council tax benefit because we said this can be done more efficiently if we devolve the power.

"Well we have and hey presto that's exactly what's happening."

In making the announcement, opposition parties said SNP ministers had breached the rules of purdah, which prevents major government announcements in an election period.

Labour health spokeswoman Jackie Baillie, said: "Everybody knows the Tories are cutting too hard and too fast, but we can't pretend this announcement plugs the gap.

"Even with today's figures, local councils face a £17m black hole across Scotland - on top of SNP ministers passing on a massive 90% of all the cuts they face to Scotland councils."

Scottish Lib Dem leader Willie Rennie added: "People will be deeply suspicious about this announcement.

"Even this morning the Scottish government said it didn't have enough money to protect bus services from cuts, but apparently they will have enough money to pay for this announcement."

Currently, 558,000 people receive council tax benefit in Scotland, worth £387m, with eligibility based on factors like income, savings, receipt of other benefits and financial status of partners.