Issue details

25/00004 - Council Tax Collection Subsidies and Incentives

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.

 

 

 

Decision type: Key

Decision status: For Determination

Notice of proposed decision first published: 29/01/2025

Decision due: Not before 27th Feb 2025 by Deputy Leader and Cabinet Member for Finance, Corporate and Traded Services
Reason: To allow the required 28 notice period on the published list of forthcoming executive decisions

Lead member: Deputy Leader and Cabinet Member for Finance, Corporate and Traded Services

Lead director: John Betts

Department: Strategic & Corporate Services

Contact: Cath Head, Head of Finance Operations Email: cath.head@kent.gov.uk Email: cath.head@kent.gov.uk Tel: 01622 221135.

Consultees

This policy decision was covered in budget report to Policy & Resources Committee on 27th November 2024

 

Financial implications: The 2024-25 budget for council tax collection subsidies and incentives is £3.75m. This includes £0.55m on fraud and error and support for debt recovery that is not included in this review.

Legal implications: S151 Officer views is that the current subsidies and incentives are discretionary and there are therefore no substantive legal implications. The statutory responsibility for council tax collection sits with collection authorities

Equalities implications: Equalities implications None Data Protection implications None