Agenda item

(Finance Portfolio Holder) To consider the attached report (C-052-2016/17).

(Finance Portfolio Holder) To consider the attached background paper alongside the report on the agenda (C-052-2015/16).

(1)        That the responses received to the consultation on the scheme for 2016/17 be noted;

(2)        That the scheme be amended to reduce the maximum liability percentage for people of working age from 80% to 75%;

(3)        That a minimum income floor for self-employed people of working age be introduced into the scheme; and

(4)        That the proposed Local Council Tax Support Scheme for 2016/17 be recommended to the Council for approval and adoption.

The Finance Portfolio Holder presented a report on the Local Council Tax Support Scheme for 2016/17.

The Portfolio Holder reminded the Cabinet that, as part of the major changes to the Welfare Benefits system, Council Tax Benefit ended on  31 March 2013 and was replaced by a new scheme called Local Council Tax Support (LCTS). A key principle of the Scheme was the protection of people who were of an age where they could claim Pension Credit. The Government introduced Regulations to ensure that pensioners who had previously received Council Tax Benefit would continue to receive the same level of assistance they had prior to LCTS being introduced. 

The Portfolio Holder reported that the Pan Essex LCTS project group, comprising of all the billing authorities and the unitary authorities in Essex, was created in January 2012 to devise a modular approach upon which all Essex authorities could base their local schemes according to local needs. The precepting authorities of Essex County Council, Essex Fire Authority and Essex Police had also been involved from the beginning of the project. The project was managed by the Benefit Managers under guidance from the Essex Finance Officers Association.

The Portfolio Holder stated that the Council had approved the Epping Forest LCTS scheme for 2013/14 in December 2012, and, since that first year, the Scheme had remained unchanged. On 23 July 2015, the Cabinet had approved the general principle that the Local Council Tax Support Scheme for 2016/17 should aim to be cost neutral for the Council and that public consultation should be undertaken on certain elements of the Scheme. Two changes to the Scheme were proposed for consultation. The first change was the reduction in the maximum support available for people of working age from the current 80% to 75%. This would entail the amount of support being reduced by £1.15 per week for a Band B property at current rates, and would reduce the overall cost of the scheme by £204,000. The second change was the introduction of a minimum income floor for self-employed people of working age, to be set at the National Living Wage for people aged 25 or over and the National Minimum Wage for people aged under 25. Claims from self-employed people were the most difficult and time consuming to process, as many people did not have audited accounts. The introduction of a minimum income floor for self employed people would greatly reduce the administrative burden on the Council, and align the LCTS with other Government Welfare Reforms to provide a consistent approach.

The Portfolio Holder informed the Cabinet that consultation on the 2016/17 Scheme, including the two proposed changes, was undertaken between 27 August 2015 and 11 October 2015. A total of 43 responses were received, which was broadly similar to consultations in previous years, and there were not any issues highlighted to give cause for reconsideration of the two proposed changes. The Cabinet was requested to agree the amended Scheme for 2016/17, and recommend its approval to the Council.

The Portfolio Holder explained that there was no specific Government Grant for Council Tax Support anymore. The Director of Resources added Officers had assumed within the report that as the overall Revenue Support Grant to the Council was reduced then the previous Grant for Council Tax Support would have been reduced. The Portfolio Holder reminded the Cabinet that the Council had a small Exceptional Hardship Fund to assist those households experiencing exceptional difficulties in paying their Council Tax, and debt advice was also on offer from the Citizens Advice Bureau funded by the Council.

Decision:

(1)        That the responses received to the consultation on the scheme for 2016/17 be noted;

(2)        That the scheme be amended to reduce the maximum liability percentage for people of working age from 80% to 75%;

(3)        That a minimum income floor for self-employed people of working age be introduced into the scheme; and

(4)        That the proposed Local Council Tax Support Scheme for 2016/17 be recommended to the Council for approval and adoption.

Reasons for Decision:

Due to reductions to Government funding, the cost to the Authority of the LCTS Scheme was increasing and, if the aim was to make the Scheme as cost neutral as possible, changes would need to be made to the Scheme for 2016/17. It was therefore proposed to reduce the maximum percentage of the Council Tax liability that was included in the calculation of LCTS entitlement for people of working age from 80% to 75%, and to implement a minimum income floor for self-employed people who declared income below the National Living/Minimum Wage. These changes would reduce the overall cost of the Scheme and align the LCTS with how income from self-employment was treated in Universal Credit.

If any changes were to be made to the current Scheme then the Council needed to approve the final Scheme at its meeting scheduled for 15 December 2015.

Other Options Considered and Rejected:

If the Council did not approve any amendments to the Scheme by 31 January 2016, the existing Scheme would have to continue in 2016/17.