Decision details

The Cabinet Member is asked to:

(a)  Review the current arrangement with collection authorities (district/borough/city councils) to provide financial support and incentive payment towards the cost of setting up and administering local Council Tax Reduction Schemes (CTRS)

(b)  Review the current arrangements with collection authorities to make an incentive payment to support removal of discretionary empty property discounts and charge empty property premiums

Reason for the decision

A commitment was made as part of 2024-25 budget agreement that £19.8m of savings will need to be made to replace the use of one-offs (reserves, capital receipts and time limited grants) it is essential that all areas of discretionary spending are reviewed.  This includes considering savings where the Council is willing to remove cross subsidy where there is no statutory requirement to provide support. The current arrangements with district councils to support council tax collection fall within this policy definition. 

Background – Provide brief additional context

The current arrangements to provide subsidies and incentives to collection authorities are a long-standing agreement following changes introduced under the Local Government Finance Act 2012 requiring collection authorities to introduce local Council Tax Reduction Schemes (CTRS) following the transfer of Council Tax Benefit (CTB) in 2013-124.  The Act also introduced additional flexibilities on exemptions, discounts and premiums on empty properties.  The original agreement on CTRS subsidies and incentives was due to be reviewed on a 3-year cycle, the first review was implemented in 2017 but there has been no further review other than to simplify schemes based on income bands

Options (other options considered but discarded)

-      Maintaining the current arrangements are not sustainable in the current financial climate with the urgent need to focus on statutory responsibilities   

-      All areas of discretionary spending, including spending where there is a mix of statutory and discretionary requirements and spending on statutory services where there is most scope to make local choices about levels of service provision

How the proposed decision supports the Framing Kent's Future - Our Council Strategy 2022-2026

Framing Kent’s Future (FKF), the KCC Strategic Statement, was approved at County Council in May 2022 and sets out the council’s ambition and strategic priorities until 2026. FKF acknowledged the significant financial and demand pressures the council would be facing over the coming four years, whilst concurrently delivering an ambitious agenda for Kent residents, businesses, and local communities.

How the proposed decision supports Securing Kent’s Future

Securing Kent’s Future (SKF) included the objective to review policy choices and the scope of the Council’s ambitions in response to the financial challenges the council faces.

As Deputy Leader and Cabinet Member for Finance, Corporate and Traded Services, I agree to:

(a)  Cease the current arrangement with Billing Authorities pursuant to which the Council provides financial support and incentive payments towards the cost of setting up and administering local Council Tax Reduction Schemes (CTRS) with effect from 1^st April 2025.

(b)  Cease the current arrangements with Billing Authorities pursuant to which the Council makes incentive payments to support removal of discretionary empty property discounts and charge empty property premiums with effect from 1^st April 2025.

(c)  Delegate authority to the Interim Corporate Director Finance to formally notify the Billing Authorities that payments will cease from 2025-26 financial year and to take any actions or make any decisions deemed necessary to the Interim Corporate Director Finance to implement the decisions of the Cabinet Member for Finance, Corporate and Traded Services in (a) and (b) above.