Agenda item - Draft Council Tax Support Scheme

Agenda item

Draft Council Tax Support Scheme


The Executive Director, Finance and Resources introduced the report and advised that the Council needed to produce this each year and had done so for a number of years.  This year’s scheme contained a number of fundamental changes from the previous scheme which had provided a blanket 85% support.


The Revenue Services Manager provided further detail in respect of the changes, together with the rationale behind them.  The report asked for authority to go out to consultation for the scheme and this was in two stages, the first with the major precepting authorities, and then the people with interest in the operation of the scheme, the residents of Bromsgrove.  The key questions that would be included within the consultation were included within the appendices of the report.  The key areas to note were:


·       The administration of the scheme - currently it was based on Council Tax Benefit and was reactive to customer changes, such as an increase in income.  It was heavy in administration and was difficult to recover the Council Tax as it became due.

·       The new scheme was based on Council Tax discount and was designed to give clear percentages of discount linked to household income which made the scheme less responsive to change and gave customers a clear idea of how much support they would receive and the impact of any changes. 

·       It prevented the Council from continually having to assess claims and was more static and allowed the Council to be able to better budget for it.  It also allowed the Council to be more responsible in the recovery of unpaid Council Tax.

·       It would also be aligned with Universal Credit which would provide the appropriate information and would allow the Council to assess and determine any Council Tax support needed at an earlier stage.  This would also help to increase take-up of Council Tax support, which had decreased.

·       The current scheme was capped at 85%, the proposed new scheme would provide the poorest household with 100% discount.

·       The housing element of Universal Credit would also be discounted, which was important for those low income households in rented accommodation.


There was a financial impact to the changes to the scheme, which would increase the cost of Council Tax support by approximately £350k which was shared between the major preceptors, approximately 12.5% by the Council and 71% by Worcestershire County Council.  It was noted that whilst there was an increase in Council Tax support at present the Council Tax demanded from recipients was not always paid and there was currently around £400k outstanding; that non-collection brought an increased cost in bad debt collection and was ultimately written off.  It was anticipated that the increase in support would improve the collection rates and balance out by reducing that bad debt that would be written off.  It should be noted that following consultation there may be some adjustment to the final scheme.


The Portfolio Holder for Finance and Resources commented that at the Finance and Budget Working Group it had been noted that the amount of savings allowed had been reduced from £16k to £6k, which had raised some concerns.  He appreciated that the report would come back again for a more detailed discussion once the consultation had been completed.  Although it was noted that Universal Credit used £16k as the amount of savings and it was therefore questioned why the Council had decided to use £6k.


It was important that the Council looked after the most vulnerable in the district, who needed this support, particularly as at the current time there was over 92k people furloughed in the County and concerns were raised around the long term effect of this.


Members discussed a number of areas following presentation of the report, including:


·       Difficulties around the savings perspective as the aim of benefits were hopefully to get the majority of people through a relatively short term situation.

·       How easy was it to access the scheme for someone who was perhaps applying for Universal Credit for the first time.  The Revenue Services Manager explained that within the existing scheme when someone applied for Universal Credit, the Council was advised by the DWP and this was treated as the claim for Council Tax Support, but currently additional information needed to be requested from the household.  The proposed changes would enable the Council to assess entitlement from that initial notification.

·       Members were pleased to see that the Council was relatively pro-active but questioned the signposting process to ensure that anyone claiming in the future would be able to access any benefits they were entitled to – again Members were mindful that the future months held a lot of uncertainty for many residents.  The Revenue Services Manager provided details of how the scheme was publicised through the Council’s website, the main trigger for people was through the Council Tax recovery process.  The scheme was publicised with any documents that were sent out to people and over the phone.  One of the benefits for the now scheme would be that it was clearer for our own officers to identify what support was available.

·       When there are changes, such as the current furloughing of people, the Council made sure that it promoted the support available through social media and other channels.  The Council was quite proactive, and had liaisons with the main housing associations in Bromsgrove and a team within the Welfare Support Team who looked after the most vulnerable.

·       It was suggested that a short email to all Councillors signposting what was available and where to find it would be useful.  It was agreed that the Communications Team would also be contacted and asked to promote this in the coming months.


Members were reminded that the proposed scheme would not come into place until April 2021 should it be agreed.  However, it was noted that whilst the existing scheme was capped at 85% within the Council’s own scheme there were additional funds available through its Hardship Fund (and additional funding had also been provided through Central Government following Covid-19), which could be used to top up the support.  This was an additional £150 for this year with a reduction in the amount that needed to be paid, on average £65.


RESOLVED that the Council will consult with the public and major precepting authorities on the introduction of a new income banded council tax support scheme for working age applicants to be implemented from 1st April 2021.




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