Government proposals to reform council tax benefit could lead to the district’s most vulnerable residents missing out on £4 million a year in support, it is feared.

Bradford Council chiefs have responded to a consultation over the plans, which would see authorities take on responsibility for a localised rebate scheme for council tax.

At the moment the benefit is administered by local authorities under national regulations and is funded by the Department for Work and Pensions. The new proposals would see councils controlling the policy while continuing to be responsible for council tax rates and collection.

The changes are intended to save the Government ten per cent – or £480 million a year. Based on previous years’ expenditure on the benefit in Bradford, this would equate to a £4 million loss of support in the district.

Council leader, Councillor Ian Greenwood, said he was concerned that achieving the Government’s objectives of protecting pensioners and the vulnerable, applying the ten per cent reduction and improving work incentives would be difficult.

He said: “It will be a disaster for Bradford. Every group we decide to protect will leave the remaining groups hit harder.”

The plans to localise council tax benefit are intended to give councils increased financial freedom and a greater stake in the economic future of their local area; reduce expenditure on support for councils by ten per cent; protect the most vulnerable in society, particularly pensions from any change in their level of support; enable councils to simplify the complex system of criteria and allowances.

Coun Greenwood added: “Fully protecting pensioners means that the effective reduction in council tax support for working age customers will be 16 per cent in the district. If support for other vulnerable groups is introduced, the reduction will fall on an even smaller group and will represent an even higher percentage.”

Cutting the level of council tax benefit would also have an impact on council tax collection rates, which could add up to “a very uncertain funding picture” for the Council, he added.