Agenda item

(Finance and  ICT) To consider the attached report.

The Principal Accountant, Brian Moldon introduced the report noting the changes to the Council tax system. The Department for Communities and Local Government (DCLG) published a consultation document on proposals for the localisation of Council Tax support for England setting out how the Government intended to implement the Spending Review commitment to localise support for council tax from 2013/14, reducing expenditure by 10%.

Local authorities are reimbursed currently at a rate of 100% for correctly awarded council tax benefit through submitting audited subsidy claims to the Department for Work and Pensions.  Under the new scheme the Government will make funding available to Councils based on 90% of the forecast council tax benefit expenditure for 2013-14. The other 10% will need to be found from savings. Pensioners are excluded from this process.

The Council is currently working with other districts within Essex and major precepting authorities to design a scheme that gives the 10% savings.  Following the completion of this exercise and a draft scheme being developed, consultation on the scheme will be undertaken with interested parties and it is proposed that the final scheme will go to Cabinet on 22 October and then onto Council on 18 December.

Mr Moldon also gave a sample calculation on what this new arrangement would mean for a parish / town council.

The meeting noted that it was currently not possible to detail the effect for each Parish / Town Council on their tax base until the scheme has been agreed.  Also it was not possible to confirm what grant would be allocated to each parish until final figures are made available as part of Local Government Finance Settlement in December.

The meeting was then opened out to questions.

Q:        Because the 40% discount for single occupancy was being ring fenced and because benefits for people of state pensionable age was being ring fenced, this would impact harshly on people of working age and low incomes. Some parishes would be markedly more affected than others and the effect on the district would be different.

A:         Yes you are right, although I must point out that the changes to the tax base is 25%. But you are right in thinking it would have an impact on the areas you mentioned. However, we would not know what until we get the final information from central government in October or November. The number of claimants in each Town or Parish council area needed to be ascertained and the appropriate software incorporated into our computer system. This should be arriving at the end of this month or early next month. Officers were looking towards the end of the calendar year to have it all in place and running.

Q:        How would you address the aspect of privacy for the smaller parishes and houses that are in part year occupancy?

A:         The figures were taken as a snapshot, historically set at 1^st October. Now Council Tax will fluctuate on a day to day basis depending on who claims benefits (or not). As for small parishes, it would not be possible to identify individuals.

Q:        Would this scheme be local to Epping Forest or to Essex as a whole?

A:         Every billing authority had to set their own scheme, however, there was good co-operation throughout Essex and we will be holding to the same style; although a part of the problem to this was the different demographic makeup of Essex.

Q:        This seems to be a complex procedure, would some sort of training be offered to Town and Parish Councils?

A:         That was partly the reason for this report and when we have more information we will as always share it with you. Also if you have a specific problem you can always call us.

The other Town and Parish Clerks agreed that they needed more than just the report offered here; they would need additional detailed help at District level to enable them to put their budgets together.

Q:        The effect of this would be that Town and Parish’s would not be able to set their precepts until later in the year, maybe mid to late January. Also all precepting authorities including Police, Fire and the County Council may have to have a greater increase in tax than they may wish.  The report assumed a 96% collection rate, but this may not be paid as it may prove not to be affordable. A lot of people of working age are hard pressed already and this may prove to be the last straw.  Is 96% a realistic figure?

A:         96% was just an indicative figure used in the calculations in this report. An overall collection rate would be calculated that would allow for low rates of collection in benefit cases and higher rates on other cases. There may have to be a greater provision made for non-payment.  Our current load is just under 9000 for Council Tax benefit and a little over half are working age claimants so that would be around 4,500 people who would be effected by this.

Q:        Would the established collection rate for each Town and Parish be available at the October Cabinet meeting?

A:         That would be unlikely, but it would be available at the Council meeting in December.

Q:        What information will go out with the Council Tax notices by way of explanation?

A:         This has not been decided as yet as it would form part of the consultation process. But, we will write to people to make them aware of the coming changes.

Q:        Do we have to pass this on to the rate payer, could we not find some other way to save money?

A:         The Government required us to reduce the amount of Council Tax Benefit we pay to people. So in reducing the Council Tax Benefit people receive leaves them with a bill to pay. That’s the National Policy we have been forced to implement.

Q:        Was this transitional and if so how long would it last?

A:         We are looking for it to be fixed for 3 to 5 years and then to look at it again.

            RESOLVED:

That the changes to the system of support for Council Tax payments be noted.