Agenda item

To receive an update on work being done in conjunction with districts and boroughs to review local Council Tax Reduction schemes prior to a consultation exercise being planned by districts to take place in the summer and local decisions on revised schemes to be introduced from 2017-18 

Dave Shipton (Head of Financial Strategy) was in attendance for this item

(1)       Mr Simmonds (Deputy Leader and Cabinet Member for Finance and Procurement) introduced the report which provided an update on work being done in conjunction with district and borough councils to review local Council Tax Reduction (CTR) schemes prior to consultation exercises by the districts during the summer and local decisions on revised schemes to take effect in 2017/18.

(2)       Mr Simmonds said that when responsibility for council tax support was transferred from the Department for Work and Pensions (DWP) to local authorities it came with a 10% saving requirement.  In Kent a base scheme was developed in conjunction with the districts to fulfil this requirement.  In addition districts could propose alternative local arrangements for working age recipients of council tax support and for discounts on second homes/empty properties.  A three-year agreement ran from 2013-14 to 2015-16, which had been extended for 2016-17 pending the fuller review now being undertaken by districts. 

(3)       Mr Simmonds said this approach had been a credit to districts and precepting authorities, collection rates had been good and he hoped this would continue following the review and introduction of new schemes.

(4)       Mr Shipton said that, although the districts and boroughs received 10%-12% of the council tax, they were responsible for collecting it on behalf of all precepting authorities.  The county council and other precepting authorities welcomed the work of the districts in achieving the high collection rates in Kent.  He referred to the timeliness of this report to the Cabinet Committee in advance of the districts’ and boroughs’ consultation on the review of local schemes.  He noted that, nationally, a declining number of authorities had adopted the default scheme (which preserved all the previous DWP working age benefits despite the 10% reduction in funding).  He outlined the complex nature of the funding for council tax support with some funding coming from the Revenue Support Grant (RSG) and some from the local share of business rates.  The element within RSG had not been protected from cuts since 2013-14 or from the future cuts planned up to 2019-20.  He said the number of CTR claimants had been reducing for a range of demographic and economic factors but this reduction was significantly less than reductions in RSG.  He said the fiscally neutral approach under the original transfer in 2013-14 might not be sustainable as the RSG reductions were not being matched by reducing claimant numbers. 

(5)       Mr Shipton said that under current schemes unitary authorities (including London Borough and metropolitan authorities) tended to ask working age people to pay a greater proportion of their Council Tax than two-tier areas.  He also said that agreeing schemes was the responsibility of district councils following a comprehensive consultation including statutory consultation with precepting authorities and there was no standard timetable for this.  He concluded by indicating that one of the objectives of the reviews was to incentivise districts to increase the tax base and collection rates.

(6)       In response to questions and comments, Mr Shipton said that South Gloucestershire Council had moved away from the traditional welfare approach; the cost of any hardship fund would have to be met from the Collection Fund; and that the report had been informed by research conducted by the National Policy Institute. 

(7)       Resolved that the report be noted.