MAIDSTONE BOROUGH COUNCIL

 

Strategic Leadership and Corporate Services Overview and Scrutiny Committee

 

Tuesday 8 July 2014

 

REPORT OF Head of Revenues and Benefits Shared Service

 

Report prepared by Stephen McGinnes 

 

 

1.           Local Council Tax Discount Scheme

 

1.1        Issue for Consideration

 

1.1.1   The Local Council Tax Discount Scheme to be implemented from 1^st April 2015 and longer term development of the scheme.

 

1.2        Recommendation of Head of Revenues and Benefits

 

1.2.1   That Committee consider, and agree, how they wish to be involved in

the development of the scheme.

 

1.2.2   That Committee notes the timetable for the schemes approval and statutory requirement to consult on the proposed scheme before final approval by 31^st January 2015.

 

1.3        Reasons for Recommendation

 

1.3.1   As part of the changes introduced through the Welfare Reform Act

the national scheme for council tax benefit was abolished from 31 March 2013 and replaced by a requirement to determine a local discount scheme.

 

1.3.2 In responding to that change a number of options were presented to Cabinet in July 2012, with Cabinet identifying the preferred scheme to be a 13% reduction in council tax benefit entitlements, whilst otherwise retaining the existing rules and criteria.

 

1.3.3 At the same time Cabinet proposed a number of changes to the council tax discounts and exemptions for empty properties, the additional revenue from which would help meet the shortfall in the proposed council tax support scheme funding. 

 

1.3.4 A public consultation was undertaken to outline and seek views on three primary options identified by Cabinet as set out below.

 

·      Option 1 - reduce benefit awards by 24.5% to reflect in full the reduction in government grant and protection of pensioners;

·      Option 2 - reduce benefit awards by 18.5% and reduce the discount for empty homes from 6 months to 3 months;

·      Option 3 - reduce benefit awards by 13%, reduce discounts for empty homes from 6 months to 1 month and remove the 10% discount for second homes.

 

1.3.5 A total of 786 responses were received with option 3, the Councils preferred scheme, receiving the greatest support (48.2%). 

 

1.3.7 On the 18 October 2012 the Department for Communities and Local Government announced the introduction of a £100 million transitional fund to help Councils lessen the impact for residents in the first year of the scheme.

 

1.3.8 The funding criteria required that the Council’s local scheme pass on an increase of no more that 8.5% in the first year and provide for no sharp reduction in support for those entering work.  An additional grant of £239,445 was made available in the first year.

 

1.3.9 Following consideration of the consultation results and opportunity provided through the transitional fund, Cabinet made the following recommendation which was agreed at Full Council in December 2012.

 

·      An 8.5% reduction in the rate of Council Tax Support applicable to all working age households during 2013/14, whilst otherwise maintaining the structure of the current national Scheme;

·      A 13% reduction in the rate of Council Tax Support applicable to all working age households during 2014/15 and 2015/16, subject to the future demand and grant received for the Scheme.

 

         That the Director of Regeneration and Communities, in consultation with the Cabinet Member for Corporate Services, be given delegated authority to make such changes as are necessary to maintain the operational effectiveness and viability of the Scheme between 2013/14 and 2015/16.

 

         That a substantive review of the Scheme be undertaken in 2015/16, with any recommended changes to the Scheme being presented to Cabinet for implementation from 2016/17.

 

1.3.10         The Council implemented a scheme in April 2013 where persons eligible for Council Tax Support would pay a minimum contribution of 8.5% towards their liability. The Local Government Finance Act 2012 states that a public consultation must take place if a scheme is either amended or replaced. The increase from 8.5% to 13% for 2014/15 was considered a change under the legislation.   

 

1.3.11         A further consultation was therefore undertaken which included a direct mailing to a sample of 500 households in receipt of council tax support and wider participation through voluntary sector partners and the wider taxpayer through an online survey.

 

1.3.12         The consultation set out 2 primary options. Option 1, to reduce benefit awards by 18.5% and option 2, to reduce benefits awards by 13%.  A total of 61 responses were received to the consultation, with 55% identifying option 2 as their preferred scheme. 

 

1.3.13         Following consideration of the consultation results, in was agreed through Full council that a Local Council Tax Support Scheme be adopted with a reduction of 13% in the rate of Council Tax Support applicable to all working age households during 2014/15.

 

1.3.14         In reaching a decision on the Scheme to be implemented for 2015/16 the council are asked to consider the outline timetable detailed below.

 

        

Cabinet – Approval of options for consultation	13.08.2014
Consultation – Statutory consultation	01.09.2014 to 30.10.2014
Cabinet – Recommendation to Full Council	12.11.2014
Full Council – Approval of final Scheme	10.12.2015

 

 

1.4        Alternative Action and why not Recommended

 

1.4.1   The committee could decide not to consider or be involved in the development of the Local Council Tax Discount Scheme, however, it is a key decision which will require the approval of Full Council.

 

1.5        Impact on Corporate Objectives

 

1.5.1   The Local Council Tax Discount Scheme to be implemented will have a significant impact on local communities, customers and value for money through the way in which the council manages public finances.

 

1.6        Other Implications

 

1.6.1    

1.      Financial	x
2.           Staffing
3.           Legal	x
4.           Equality Impact Needs Assessment	x
5.           Environmental/Sustainable Development
6.           Community Safety
7.           Human Rights Act
8.           Procurement

 

 

1.6.2   Financial - The expected government grant for 2014/15 was £9,040,000 against an estimated cost of £9,607,000. The cost of final scheme for 2015/16 will be dependent on the final scheme approved.

 

1.6.3   Legal – The council are required to consult on the scheme proposed for 2015/16 and approve the final scheme by 31^st January 2015. 

 

1.6.4   Equality Impact Needs Assessment – An impact assessment will be undertaken to support the options and final scheme recommended for approval.

 

1.7        Relevant Documents

 

1.7.1   Appendices

None

 

1.7.2   Background Documents

Report to Full Council December 2012

Report to Full Council December 2013

 

IS THIS A KEY DECISION REPORT?                  THIS BOX MUST BE COMPLETED   X     Yes                                               No     If yes, this is a Key Decision because: ……………………………………………………………..   …………………………………………………………………………………………………………………………….     Wards/Parishes affected: …………………………………………………………………………………..   ……………………………………………………………………………………………………………………………..