Agenda item - Localisation of Council Tax Support

(Finance & Technology Portfolio Holder) To consider the attached report (C-009-2012/13).

(1) That a general principle of Local Council Tax Support being cost neutral for the Council be agreed;

(2) That the following elements of the scheme be approved for consultation purposes:

(a) protection for pension age claimants to ensure their Council Tax support under the new scheme would not be less than the Council Tax Benefit currently being received; and

(b) the amount of support to working age households be reduced by the principles of the Essex-wide framework and the following local measures:

(i) the calculation of support to be based on 80% of the Council Tax bill rather than 100% as at present;

(ii) the calculation of support to be based on a maximum of a band ‘D’ property;

(iii) the inclusion of child maintenance in the calculation with a disregard of £15 per week per family;

(iv) a reduction in the period of backdating (with good cause) from the current six months to three months; and

(v) the introduction of an exceptional hardship scheme to support those people for whom their increased Council tax liability arising from their individual circumstances was causing exceptional difficulty;

(3) That the following potential options for incorporation in the scheme be included as part of the consultation process:

(a) a flat rate non-dependent deduction be included in the calculation instead of the varying rates currently used to calculate Council Tax Benefit;

(b) the inclusion of Child Benefit in the calculation of support;

(c) a minimum award of £1 per week to reduce administration costs; and

(d) protection from a reduction in support for certain groups such as the disabled or families with children under five years of age;

(4) That the Council’s participation in the six week county-wide consultation exercise, commencing on 1 August 2012, be agreed; and

(5) That the Chairman of Council be requested to waive the call in arrangements for this decision due to its urgency as any delay would prejudice the Council’s interest.

The Leader of the Council presented a report concerning the Localisation of Council Tax Support, on behalf of the Portfolio Holder for Finance & Technology who had tended her apologies for absence.

The Leader reported that the Finance & Performance Management Cabinet Committee had received an overview of the Government’s decision to replace Council Tax Benefit with a new system of Local Council Tax Support, at its meeting on 25 June 2012. The timetable for implementing a Local Council Tax Support scheme was very tight, with the final scheme requiring approval by the full Council in December 2012. The draft scheme would be subject to formal consultation with the major precepting authorities (Essex County Council, Essex Police Authority and Essex Fire Authority), as well as the public and voluntary bodies. In order to achieve approval of the final scheme in December 2012, the consultation would need to be undertaken for a six-week period commencing on 1 August 2012, and it was therefore necessary for a draft Local Council Tax Support scheme to be determined by the Cabinet.

The Leader added that the Council’s draft scheme was being prepared within the framework of an Essex-wide scheme that sought to achieve cost neutrality, i.e. the cut in Government funding was to be offset by making reductions in the amount of support that working age households could receive. It was still intended to provide protection for pensions age claimants, such that support under the new scheme would not be less than the Council Tax Benefit currently being received.

The Leader presented a number of measures, based upon the Essex-wide framework and local measures, to be approved for consultation and requested that a number of other potential options in the scheme be considered for inclusion in the consultation process. As the timetable was very short for implementing a new scheme, the Chairman of Council would be requested to waive the call-in arrangements for this item due to its urgency.

Some concern was expressed about the timescales involved and the effect on Local Councils in setting their precepts. The Director of Finance & ICT stated that the Council had no choice over this matter due to the direction from the Government, and that Officers had attended the recent Local Councils Liaison Committee meeting to brief the Town and Parish Councils on the legislation. The Cabinet’s attention was also drawn to the advice of Officers to not include residency qualification at the current time, due to the issues involved. The Director added that the likely increase in caseload and effect on Council Tax collection rates had been considered and the intention was to achieve a 12% saving on the amount of Council Tax Benefit currently paid out, depending on the options agreed for inclusion in the final scheme. The Scheme would be reviewed annually. Finally, it was highlighted to the Cabinet that a number of other changes to the welfare system would be introduced in the next two to three years, which would impact upon residents.

Decision: