Agenda item

Draft Council Tax Reduction Scheme 2021/22 Part 2

To consider and provide a recommendation to Cabinet on the proposals set out in the attached report.


Sheila Coburn, Head of Revenues and Benefits Shared Services introduced the report that dealt with the proposed changes to the Council Tax Reduction Scheme for 2021/22.


Discussion and responses to Members questions included the following:


-       On 6 August 2020, Cabinet agreed that TWBC would introduce an income banded scheme for next year and consult on 3 income banded schemes that had been modelled by external consultants.

-       There was a need to replace the current Council Tax Reduction Scheme as it was outdated and was completely reactive to changes.

-       The number of cases that had moved to Universal Credit and the multiple changes that occurred resulted in Council Tax bills being issued each time.  This brought challenges to the administration of Council Tax Reduction, the collection of Council Tax and was very confusing for customers.

-       The objectives that were considered when looking at an income banded scheme were to maintain the maximum basis of award of 80% of Council Tax liability, protect disabled households, simplify assessments and reassessments, maintain the amount of awards to claimants in line with the current scheme and understand the impact on specific groups based on gender, disability and age.

-       TWBC consulted on 3 models that were detailed in the report.

o   Model 1 – this was an income banded model which only took into account employment earnings.

o   Model 2 – this was the same as Model 1 but with an additional uplift of 5% for those claimants in receipt of a disability or sickness benefit in bands 2 -5 for either themselves or someone else in the household.

o   Model 3 – this would reduce the maximum award to 70%.

-       The survey was issued to 5,500 residents by post and email.  492 responses were received.

-       Responders were asked to rank their preference, however only 56% of those who responded answered this question.  Model 2 was ranked the highest at 2.37, followed by Model 1 at 2.16, Model 3 was the lowest at 1.59.

-       The recommended option was Model 1.  The reasons for this choice was that it met all the objectives set when looking at a new income banded scheme. 

o   To maintain the maximum basis of award of 80% of Council Tax liability.

o   80% of the Council Tax support case load would fall within Band 1, leaving only 20% in Bands 2-5.

o   The disabled and sickness benefits that were received made up a high share of household income each month.  These were not taken into account when calculating Council Tax Reduction because only employment earnings were taken into account.

o   When a person was not earning they would fall into Band 1 with maximum support.

o   Off the 244 disabled cases currently in receipt of Council Tax Reduction, 68% fall into Band 1 with maximum support. 

o   Changes would only need to be made should employment earnings go into another Band.

o   Model 1 was modelled with the monthly net earnings and percentage award to keep the cost of award the same.

o   Council Tax Reduction was not Government funded and the cost of award and support was shared by the Council and its preceptors.

o   Kent CC picked up the biggest share of the Council Tax Reduction Scheme and would only support a scheme that maintained cost.

o   The spend for any new scheme must therefore be in line with the cost of the previous scheme had it been carried forward into 2021/22.

o   Female claimants were most likely to experience negative impacts.  This was because there were more females claiming Council Tax support. 

-       In addition to Model 1 meeting all the objectives the continuing uncertainty around Covid-19 meant that it was likely the number of claimants would increase. 

-       TWBC needed to be fair to all taxpayers as they in effect funded the scheme.

-       The software that would be used for Model 1 was readily available.  If the Council went for Model 2, part of the software could be used but it would be a manual process for the uplift for disabled applicants.  This wasn’t a reason for not going with Model 2, but it was deemed, for the first year at least, to go with the simplest and fairest option.

-       One of the Members was concerned that the impact of the Pandemic had resulted in an increase in the number of families now living in poverty - 51% of families were in arrears for Council Tax and/or other bills, new claims for Council Tax support had more than doubled, unemployment had increased to around 5% and job vacancies since May had gone down by 72%.  Given these unprecedented circumstances, the Member suggested the level of support should not be reduced and instead recommended that there should be a temporary increase in support and that it should be viewed as an investment, not a cost.  The Member further recommended that the CAB not support the recommendations on the grounds of 3.4 ‘Another reason, as decided by the meeting of the Cabinet Advisory Board’ - That the schemes offered were prior to the crisis the Council was now in, the Council should immediately explore  the option to provide an increase in Council Tax support for the next financial year, to be treated as a one off priority. 

-       The Council recognised that it was not possible to predict the future with regards to the Covid-19 Pandemic but suggested there might be other ways the Council could help those in need, Government Grants etc. rather than through the Council Tax Reduction Scheme. 

-       The Pandemic was a national issue and therefore far greater than the financial resources of individual Councils.  The Government was acutely aware of these issues and was better placed to step in and provide the necessary financial support. 

-       This was a complex scheme which had already been out for consultation.  To start to vary or introduce changes at this late stage might not be advisable.

-       The Committee had already considered the Draft Budget Report for next year which made clear the Council was not able to balance its own budget within its own resources and was having to dip into reserves.  The Council would therefore struggle to provide any more financial support to this scheme.

-       It was therefore suggested these concerns should be raised at the National level as it affected residents across the whole country.

-       It should also be noted that TWBC made up only one component of Council Tax.   

-       As part of the consultation TWBC had to consult with its preceptors.  Kent CC made clear that they would not support a scheme that would cost any more than if the current scheme had continued.

-       Government had introduced an increase in Universal Credit of £20 per week.  Other measures included free school meals for those on benefits. 


Councillor Everitt proposed and Councillor Hayward seconded a motion not to support the recommendations set out in the Report but to research and implement a one off increase in Council Tax Support for the next financial year.


Councillor Everitt requested a recorded vote.


Members who voted for the amended motion: Councillors Everitt and Hayward (2)


Members who voted against the amended motion: Councillors Holden, Simmons, Reilly, Dawlings and Scott (5)


Members who abstained: Councillors Chapelard and Hickey (2)


The motion was not carried.


Members voted to support the recommendations as set out in the Report:


Members who voted in favour: Councillors Holden, Simmons, Reilly, Chapelard, Hickey, Dawlings and Scott (7)


Members who voted against: Councillor Everitt (1)


Members who abstained: Councillor Hayward (1)


RESOLVED – That the recommendations to Cabinet as set out in the report be supported.







Supporting documents: