This report seeks approval for proposals for consultation on changes to the Council’s Council Tax Reduction Scheme for 2020/21.

James Pickering, Welfare Reform Manager, will present and be available to answer any questions.

Cabinet on 11 September 2019 will be recommended to:

1)    Agree that the proposals for the 2020/21 Council Tax Reduction Scheme outlined in the report be subject to consultation for an 8 week period from 23rd September 2019; and

2)    Instruct the Head of Financial Services to bring a further report to Cabinet in January 2020 to outline the outcome of the consultation process and make proposals for the 2020/21 Council Tax Reduction Scheme.

With the agreement of the Panel the order of the agenda was changed to consider item 6, the Council Tax Reduction Scheme 2020/21 before item 5, the Treasury Management Strategy: Annual Report and Performance 2018/19.

The Panel considered a report presented by the Cabinet Member for Supporting Local Communities, Councillor Marie Tidball, and supported by the Welfare Reform Manager on the proposals to go out for consultation regarding changes to the Council’s Council Tax Reduction Scheme for 2020/21. In introducing the report Councillor Tidball drew out a number of key issues around the Council’s scheme to support those unable to cover the cost of Council Tax:

·         That the previous Central Government provided funding towards the Council Tax Reduction Scheme, the Revenue Support Grant, had been phased out meaning the Council no longer received financial support from Central Government towards the scheme

·         The cost to the Council of the scheme for the financial year 2020/21 was anticipated to be £1.7 million, but would be dependent on external factors such as the level of Council Tax

·         Monitoring of previous changes to the Council Tax Reduction Scheme around instituting a minimum income floor for self-employed claimants had not shown an increase in costs, but the change had been positive for those impacted and basing discounts on actual rather than assumed earnings was an equitable policy position

The changes proposed for consultation were in relation to:

·         Changes that to enable the Council Tax Reduction to be applied from the date of the claim, rather than the Monday after the change.

·         Leaving a Council Tax Reduction claim open for six months whilst there is a Universal Credit application in place.

·         Whether or not to introduce a banded income approach for working age claimants, in the same way as UC claimants are treated, from 2021/22.

Councillors raised a number of questions as the practicalities of the Council Tax Reduction Scheme and how it operated alongside other Council Tax discounts, such as the Single Person’s Discount. It was suggested by the Panel that the subject could be usefully addressed at a forthcoming Member Briefing.

Further discussion focused on the size of the Council’s discretionary support, whereby the Council had the right to waive Council Tax in certain circumstances outside the Council Tax Reduction Scheme. It was noted by Councillors that the discretionary support liability would fall exclusively on the Council rather than being apportioned pro rata amongst the preceptors as under the Council Tax Reduction Scheme, meaning write-offs would form 100% of the Council Tax expected, rather than 15.7%. Whilst known to be relatively small it was not possible at the Panel to confirm the budget for discretionary support, but the Head of Finance agreed to find out and circulate to Panel members. It was also encouraged that access of discretionary Council Tax support be monitored.

Responses to other questions confirmed that the Council had confidence that those eligible for the Council Tax Reduction Scheme were indeed claiming the reduction, and that the Council was aware that Universal Credit meant that a separate claim was required and had been taking active steps to raise awareness. It was also confirmed that the County Council would be unlikely to have strong views on the Council’s proposals despite financial implications of the choices made being passed on.

Significant discussion took place with regards to the questions being consulted on and whether they reflected the variety of options open to the Council, particularly in light of more radical options that could be considered in the future due to anticipated medium term financial pressures. In particular, the Panel discussed the merits and demerits of gauging opinion on having a minimum Council Tax payment for all. It was noted that opinion from other authorities was mixed on the cost-effectiveness of implementing such a policy, with some finding the administrative costs of securing low-level payments to outweigh the income, whilst others finding the policy was income generative. In relation to whether the questions of the consultation should be amended the benefit of using the same questions as previously for benchmarking purposes was noted, as was the importance of giving the impression the Council was intending to make radical changes to the scheme when the recommendation was for three fairly small ones. Likewise, it was suggested that the challenges, consequences and viability (or otherwise) of alternative suggestions, such as cutting services and increasing fees and charges were unclear in the consultation questions. It was agreed that no changes should be recommended to the consultation questions but that the points made would be borne in mind for the next year.