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Agenda item

Council Tax Support Scheme Review

Cabinet Member: Cabinet Member for Croydon Renewal, Councillor Stuart King and Cabinet Member for Resources & Financial Governance, Councillor Callton Young

Officer: Interim Corporate Director of Resources (Section 151) and Deputy Chief Executive, Richard Ennis

Key decision: no

Decision:

RESOLVED: To

 

1.    Approve statutory consultation on the introduction of a new income banded Council Tax Reduction (Support) Scheme for working age claimants from 1st April 2022.

 

2.    Agree that the recommended scheme to be consulted on be an income banded Council Tax Support scheme, which:

 

·         Retains 100% protection for Pensioners, care leavers under 25 and Disabled non-working residents

·         Utilises income bands of £50

·         Has a  maximum level of income per week before someone is not eligible for CTS of £450 per week or £23,400 per year

·         Has a maximum discount awarded for (not protected) working age residents of 80%

·         Introduces a Hardship Fund to support residents transition from the current CTS scheme to an income banded scheme  

Minutes:

The Cabinet Member for Croydon Renewal (Councillor Stuart King) informed Members that the report sought approval to undertake a statutory consultation on the introduction of an income banded Council Tax support scheme. It was noted that the support scheme cost in region of £35 million in 2021/22; a cost which had been rising for a number of years and was estimated to rise to £40 million within the following few years.

 

It was highlighted by the Cabinet Member that the council had not been properly funded by the government for this support and that funding had decreased since 2013. Following changes in the funding from government in 2013, the Cabinet Member noted, a number of councils had moved to amend their support schemes with the introduction on income banding; however Croydon had not. 

 

It was felt that an income banded scheme was a simpler and fairer scheme to operate for both the council and residents. It was stated that the proposed scheme took into account combined household income with support targeted at households with the lowest incomes and greatest needs. The Cabinet Member stated that the scheme would protect pensioners, care leavers under the age of 25 and non-working disabled residents; with around 9000 households continuing to be protected. The Cabinet Member highlighted that there was also a recommendation to introduce a hardship fund to support residents in the transition from the current scheme to the new scheme.

 

The Cabinet Member stated that he had made it clear with officers that it was important that there was genuine and meaningful consultation with experts and the stakeholder community who understood the Council Tax scheme to ensure the scheme which was consulted on achieved the objectives and there were no unintended consequences. It was confirmed that the final details of the scheme would take into account the outcome of the consultation.

 

In response to the question from the Cabinet Member for Culture & Regeneration (Councillor Oliver Lewis), the Cabinet Member for Croydon Renewal stated the reason for the increasing costs in recent years had been due to the rise in numbers who were working poor, who were struggling to make ends meet and had become eligible for support.

 

The Cabinet Member for Homes (Councillor Patricia Hay-Justice) queried how much the increased efficiency of running the new scheme may result in terms of savings and whether that had been factored into the expected savings of £45.7 million.

 

The Cabinet Member highlighted paragraph 3.8 of the report and noted that an average 40% of Universal Credit claimants had between eight to 12 changes in entitlement per year. Each time an entitlement changed then the council recalculated the Council Tax liability and instalments due. By moving to an income banded scheme, the Cabinet Member stated there would be efficiencies in terms of the administration of the scheme which were confirmed to be in region of £250,000 per year which had not been included within the savings figure in the report.

 

The Cabinet Member for Children, Young People & Learning (Councillor Alisa Flemming) queried what consideration had been given to support care leavers from the age of 25 to transition into paying for Council Tax. Furthermore, she queried how long it was intended the hardship fund would be in operation for. In response, the Cabinet Member stated that the hardship fund would be in operation of the first year of the new scheme. He further noted that one of the purposes of the consultation was to ensure the scheme and fund served the purposes of supporting people.

 

Concerns were raised by the Cabinet Member for Resources & Financial Governance (Councillor Callton Young) that a resident had challenged that the proposed scheme, alongside the changes to Universal Credit, was too much to bear and queried whether a disabled resident who was not working would be impacted by the change. In response, the Cabinet Member stated that without knowing the full details he was unable to categorically confirm; however highlighted that vulnerable disabled residents would not affected by the proposals as they were specifically protected. The Cabinet Member stressed that it was important to use the consultation to fully understand all the possible scenarios.

 

The Shadow Cabinet Member for Croydon Renewal (Councillor Jason Cummings) noted that there had been a number of comments at the meeting in relation to those residents who would not be affected by the changes to the Council Tax support scheme, however noted that around £5.7 million of support currently provided would no longer be available. It was noted that there were a significant number of people in the borough who were on low incomes and would no longer receive support. In light of this impact, the Shadow Cabinet Member queried whether the Cabinet Member felt the proposal to be at odds with the way the Labour Group had spoken about Government changes to benefits.

 

The Cabinet Member stated that he felt there were differences in the way the Government was proceeding with changes to Universal Credit and how the council were seeking to address the financial challenge it faced. The council, it was stated, were seeking to protect the most vulnerable whereas the Cabinet Member stated the Government were proposing a blanket cut which did not take into account the needs of those impacted. Additionally, it was highlighted, the council were consulting on the proposals and seeking the views of experts to ensure there were no adverse impacts; whereas the Cabinet Member stated the Government had taken a decision despite the objections it faced.

 

The Shadow Cabinet Member for Resources & Financial Governance (Councillor Simon Hoar) queried how many households would be negatively impacted by the proposed changes and whether the capital receipts from asset sales could be used to support this service and reduce the impact on residents.

 

The Cabinet Member noted, in response, that 10% of the savings were proposed to be reinvested into the hardship fund. In terms of the number of households which could be impacted by the change, the Cabinet Member stated the figure was likely around 20,000 however, it was suggested that the consultation would enable the council to understand the impact the hardship fund would have on mitigating the worst impacts.

 

The Leader of the Council delegated authority to the Cabinet to make the following decisions:

 

RESOLVED: To

 

1.     Approve statutory consultation on the introduction of a new income banded Council Tax Reduction (Support) Scheme for working age claimants from 1st April 2022.

 

2.     Agree that the recommended scheme to be consulted on be an income banded Council Tax Support scheme, which:

 

·       Retains 100% protection for Pensioners, care leavers under 25 and Disabled non-working residents

·       Utilises income bands of £50

·       Has a  maximum level of income per week before someone is not eligible for CTS of £450 per week or £23,400 per year

·       Has a maximum discount awarded for (not protected) working age residents of 80%

·       Introduces a Hardship Fund to support residents transition from the current CTS scheme to an income banded scheme  

Supporting documents: