Council tax could rise to ease benefits cuts In parts of Dorset and Yorkshire, for example, working-age claimants would face a 33 per cent cut in council tax benefit. The IFS said the 10 per cent cut would leave councils facing a choice between making significant cuts in benefit for working-age households and finding the money elsewhere, either by cutting services or increasing tax. Scotland's devolved administration has taken the choice to find the money elsewhere, to avoid major cuts in benefit payments. The IFS calculated that the average English local authority choosing to do the same would either have to cut spending on other services by 0.4 per cent, or increase council tax by 1.9 per cent. Sir Merrick Cockell, chairman of the Local Government Association, said that councils are being put in an impossible position and may have to increase taxes. "Councils are extremely worried about how they're going to protect deserving and vulnerable people from the £500 million cut to council tax benefit next year," he said. They can either cease helping the working poor, or continue to support them by taking money from other services or putting up council tax. In a report on the council tax benefit reform, the IFS suggested that a localised benefit regime could "undermine" the Coalition's flagship Universal Credit welfare reform. Universal Credit, due to begin next year, is meant to integrate all benefits into a single system, and ensure that people claimants are always better off if they take paid work. However, council tax benefit has been left out of the new system, and the IFS warned that trying to co-ordinate the local and national benefits system would be complex and possibly damaging. Depending on how councils design their welfare rules, the effect could be to "reintroduce some of the extremely weak work incentives that Universal Credit was supposed to eliminate." Overall, the IFS concluded, the localisation of council tax benefit "has the potential to undermine many of the positive impacts of Universal Credit." Bob Neill, the local government minister, said that the Government's reforms were right. He said: "It is right that local authorities, who collect council tax, have a strong incentive to put in place a fairer local council tax support scheme that helps their residents get back into employment based on local priorities."