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As part of the 2010 Spending Review the Government announced an intention to localise support for Council Tax from 2013-14 and to reduce expenditure on this benefit by 10%.

The Welfare Reform Act 2012 provided for the abolition of Council Tax Benefit (CTB). Provisions for the localisation of Council Tax support were included in the Local Government Finance Act 2012.

A one-off transition to the new localised schemes of support took place in April 2013. The move to localised assistance, coupled with the 10% reduction in expenditure, is expected to deliver savings of £410m in England. The Government has stressed the importance of the measure to its deficit reduction programme.

This note provides background to the introduction of Council Tax Reduction schemes and the abolition of CTB. It includes a summary of comment on the proposal and attempts to amend the Act as it progressed through Parliament.

This note will not be updated after June 2013. For developments in relation to Council Tax Reduction schemes see Library Note, Council Tax Reduction Schemes (SN/SP/6672).

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