Council Tax hike to pay for social housing - Sam Bowman comment

Ahead of the government's announcement that it will allow English local authorities to raise council tax bills to pay for social care, Sam Bowman made the following comment:

Sam Bowman, Executive Director of the Adam Smith Institute, said:

"If the state is going to shoulder a large part of the social care burden it makes sense that other benefits to the elderly should be cut to help pay for it. The triple lock, in particular, is forcing us to divert funds to those who do not need it – with inflation at just over 1 percent the triple lock requires a 1 percent real terms increase at a minimum when all other areas of government spending are being cut.

"Council tax rises would hit landowners, who may be older on average, because when council tax bills rise, rents generally fall in proportion to that. But a tax rise would be a blunt tool. If it’s cost-effective to means test things like free bus passes and the winter fuel allowance, that might be another way to make sure we’re not wasting money on wealthier pensioners, but all means testing that looks at assets (like the size of your pension pot or the value of your home) is a harmful disincentive to saving, which makes us all poorer.

"All of this is a poor second-best for making people pay their own way: the government should start planning for the long-term by requiring people to save for their old age care now, topping up the contributions of people on low incomes, so that when they get older they have a pot of savings dedicated to their social care. This is the only way to guarantee care for all in the long run and create a stable path for an ageing society. "

For further comment or to arrange and interview please get in touch: flora@adamsmith.org, 02072224995.