See (much much) more analysis in our overnight report! www.resolutionfoundation.org/publications...

Nevertheless, the Chancellor managed at this Budget to expand her fiscal headroom in a way that was progressive and boosted incomes for the poorest households. The announcement on the two-child limit in particular was extremely welcome.

And despite the giveaways and U-turns, the outcome of the miserable productivity outlook and tax rises is continuing stagnation in overall living standards. Real Household Disposable Income growth across this Parliament is expected to be the second worst on record, beating only the last one

It is not clear where the Chancellor might look if further tightening is needed - a real possibility given rising unemployment and a weak outlook for productivity. A more consistent set of priorities would be welcome.

This points to a deeper confusion over who should bear the pain of fiscal consolidation. In Spring, the Chancellor's answer was disabled people; yesterday she asked everyone to pay a little more but especially richer households

This picture is different from what it looked like after the Spring Statement, when the cumulative impacts of this Government's announcements were regressive overall. The change is driven by the 2-child limit repeal and the backtrack on planned cuts to PIP and UC-Health bsky.app/profile/alex...

Zooming out, yesterday's announcements mean the distributional impact of all policies announced by this Government is now progressive: the bottom half lose 0.1% of the household income on average by 2029-30 from this Government's changes, compared to 1.4% for the top half

Benefit changes since Autumn Budget 24 outweigh tax rises for half of households in the bottom half of the distribution, and two-thirds of the poorest decile. In contrast, 4/5 households in the top half, and almost all households in the richest decile will find themselves worse off overall

But for entitlement-based support like Council Tax Reduction, localisation is unlikely to improve on a centrally-designed scheme and can lead to unfairness, inefficiency and arbitrary hardship.

The Government should also be clear that discretionary crisis support cannot be expected to fully make up for shortfalls in support in the UK-wide, entitlement-based social security system

Overall, social security support can benefit from localisation but it should only be done when the advantages of local delivery are clear and realizable. For discretionary support, this means protected funding and clear but not constraining guidance from central government.

This would bring CTR in England in line with the schemes in Scotland and Wales, would close one of the gaps in available support that has opened up as a result of country-level devolution, and make Council Tax Reduction equitable across Great Britain and between working- and pension-age families.

We estimate that centralising CTR under the current default scheme, which mirrors the old Council Tax Benefit and covers up to 100 per cent of Council Tax liability, would cost around £400 million in higher support in 2029-30 compared to the current funding model

We recommend that the design and funding of CTR in England is returned to central government. This would ensure the established design principles for entitlement-based support are consistent across the country, and avoid the inefficiency of requiring each local authority to design its own scheme.

(There is also a correlation between Conservative-control (vs control by other partes) and lower generosity, which could be seen as localisation working in that it reflects local democratic choices)

A regression analysis of CTR generosity found that low financial resilience and high deprivation in LAs were correlated with less generous schemes, suggesting design decisions are driven by financial pressures, and residents less likely to be able to pay Council Tax are required to pay more

This is inefficient, but at worst has led to legal challenges (see cases in Trafford, Sandwell and Croydon, where changes to schemes were found to be discriminatory against certain groups).