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Agenda item

LOCAL COUNCIL TAX SUPPORT SCHEME FROM 1 APRIL 2019

Decision:

Cabinet:

(1)  recommended to Full Council that the current Council Tax Support Scheme continues wherebythe maximum award available to working age people receiving support remains at 76% for the Council Tax billing year 1 April 2019 to 31 March 2020;

 

(2)  recommended to Full Council that the Council continues with the £750,000 earmarked in reserves for a Discretionary Hardship Fund under section 13A(1)(c) of the Local Government Finance Act 1992 as amended by the Local Government Finance Act 2012, to offer additional help and support to those suffering the greatest financial hardship as defined in the Discretionary Housing Payment and  Council Tax Hardship Scheme published on the Council’s website;

 

(3)  noted that the remaining provisions of the Council’s scheme for 2019/20 will be as published on the Council’s website;

 

(4)   noted that the current scheme would no longer be fully funded within the assumed Government funding envelope.  The projected cost of the scheme will be reflected in the calculation of the council tax base for 2019/20, and will be included within the next MTFS refresh as part of the budget setting process; and

 

(5)  noted that before any significant changes to the scheme reducing or removing support could be made, a statutory consultation would need to be carried out.

 

OPTIONS AND ALTERNATIVES CONSIDERED

 

It is a statutory requirement that Council considers and adopts a CTS scheme from 1 April 2019 and identifies the sources of funding.

The options available to the Council for a CTS scheme from 1 April 2019 are to continue with the existing scheme or design and consult on an alternative less generous self-funding scheme or a more generous scheme.

Before any significant change can be made to the scheme there is a legislative requirement to undertake a full consultation with residents, the GLA and other stakeholders. Legislation dictates that the Council must decide on a scheme by 11 March but as the cost of the CTS scheme forms part of the budget setting process and Council Tax annual billing, approval for a new scheme would need to be made by 31 January 2019. There may be insufficient time remaining to undertake a meaningful consultation and obtain approval for a new scheme to commence from 1 April 2019.   Adopting a significantly different scheme without following the statutory requirements to consult would be unlawful.  

To continue with the current CTS scheme in which support is restricted to 76% requires it to be part-funded by an estimated £2.2million.  Council would need to consider the options for funding the deficit.  There are various options including:

·         Increase Council Tax by an estimated 2.2% in 2019/20 over and above the current assumption. However this would require a referendum since the MTFS already assumes an increase in the core council tax of 1.99% and a further 1% social care precept in 2019/20. Should Council choose this option consideration would need to be given to how the costs (just the referendum alone would cost £350,000) would be funded as this is not currently covered within the reserves.

·         The Council could resource the reduction in Government funding by cuts to Council services. However, the current MTFS Already assumes approximately £7 million new savings besides that identified in 2019/20.

·         The Council could consider using reserves to support the scheme and in the 2018/19 Budget Setting the decision was made to retain any collection fund surplus in a Tax Base fluctuations reserve to offset future deficits on the NNDR collection fund. However, this would be a short-term solution and would not address the on-going financial requirement.  The use of reserves is an approach that the Council has established for dealing with hardship that arises from the scheme.

 

Minutes:

Councillor Ali introduced the report and said that the scheme assisted low income and working age households.  He confirmed that no changes were proposed to the scheme for the third year running and stated the importance of the Council keeping the current scheme as it gave residents a degree of certainty.  Councillor Ali also explained LBWF was now a Universal Credit full service borough.

 

The Leader stated that the move to Universal Credit was creating hardship in the borough and said that this report was a sensible response to significant changes to council tax support schemes brought about by the Coalition Government.

 

Cabinet:

 

(1)  recommended to Full Council that the current Council Tax Support Scheme continues wherebythe maximum award available to working age people receiving support remains at 76% for the Council Tax billing year 1 April 2019 to 31 March 2020;

 

(2)  recommended to Full Council that the Council continues with the £750,000 earmarked in reserves for a Discretionary Hardship Fund under section 13A(1)(c) of the Local Government Finance Act 1992 as amended by the Local Government Finance Act 2012, to offer additional help and support to those suffering the greatest financial hardship as defined in the Discretionary Housing Payment and  Council Tax Hardship Scheme published on the Council’s website;

 

(3)  noted that the remaining provisions of the Council’s scheme for 2019/20 will be as published on the Council’s website;

 

(4)   noted that the current scheme would no longer be fully funded within the assumed Government funding envelope.  The projected cost of the scheme will be reflected in the calculation of the council tax base for 2019/20, and will be included within the next MTFS refresh as part of the budget setting process; and

 

(5)  noted that before any significant changes to the scheme reducing or removing support could be made, a statutory consultation would need to be carried out.

 

Supporting documents: