Agenda item

(Report of the Interim Chief Operating Officer. To be introduced by the Cabinet Member for Resources and Culture). The report seeks approval from Cabinet to make recommendations with regard to the Council Tax Reduction Scheme to Full Council on 24^th November 2014.

Due to its size Appendix C has not been included in the pack. It has been published online and is available in hard copy on request from the Principal Committee Coordinator (contact details set out at the end of the agenda).

Cabinet considered a report, introduced by the Cabinet Member for Resources and Culture, which asked Cabinet to make recommendations with regard to the Council Tax Reduction Scheme to Full Council on 24 November 2014.

In introducing the report the Cabinet Member for Resources, Councillor Arthur, noted that following the transfer of responsibility for Council Tax Benefit to Local Authorities from April 2013, Haringey ran a replacement Council Tax Reduction Scheme that protected pensioners and those in receipt of certain disability benefits. He noted that the Council was obliged, by law, to consider each financial year whether to revise or replace it’s scheme and as such the report set out proposals for adoption by Council on 24 November with regard to this.

The proposals recommended for adoption by Council on 24 November proposed that there should be no change to the existing scheme thereby continuing to protect pensioners and those in receipt of certain benefits.

RESOLVED:

1. That the following recommendations be taken forward for consideration by Full Council on 24 November 2014;

2. That having taken into account the Equalities Impact Assessment, set out at Appendix B of the report, the Council should resolve not to revise the Council Tax Reduction Scheme agreed for 2013/14 and continued in 2014/15;

3. That, accordingly, the scheme as summarised in Appendix A of the report and set out in full at Appendix C of the report, should continue to be implemented for 2015/16.  The principles of this are:

4. That authority to be given to the Chief Operating Officer and Assistant Director of Customer services to take all appropriate steps to implement and administer the Scheme.

Alternative Options Considered

In accordance with paragraph 5 of Schedule 1A to the Local Government Finance Act 1992 (the 1992 Act), each financial year the Council is required to consider whether to revise or replace its scheme.  One option for the Council is to continue with the scheme in place for the current financial year.  Another option is to revise the scheme in some respects.  The Council could choose to increase or decrease the amount of financial support available under the scheme.  Options should be considered in the light of the knowledge gained during the implementation of the scheme over previous years. 

The options for changing the scheme that have been considered to date have been listed below.  Some of these were proposed by respondents to the consultation undertaken prior to adpopting the 2013/14 scheme.

1. Increase the level of financial support so all customers pay less
2. Decrease the level of financial support so all customers pay more
3. Absorb the full shortfall into the Council budget by providing financial support up to the level previously funded by Central Governement as part of Council Tax Benefit. 
4. Protect certain vulnerable groups in addition to those in receipt of certain disability benefits, these include but are not limited to:

Households with children

Households with a child under one

Households with a child under five

Households with more than three children

Households with a lone parent

Protect band A-C properties

Protect claimants on current maximum entitlement

Protect claimants who are working but on low income

Protect claimants who have been impacted by the Benefits Cap or Social Size Criteria changes

Protect claimants in receipt of Single Person’s Discount

Increase Council Tax

A breakdown of these options with accompanying financial data has been provided in Appendix D of the report.  Appendix D further sets out the potential advantages and disadvantages of each option. 

Having regard to the detailed points set out at Appendix D of the report, it is recommended that none of these options for change are taken forward.  This is because:

1. Any option which would require the Council to increase levels of support for Council Tax payments would need to be directly funded by the Council and given the competing demands on the Council’s limited budget, increasing support for Council Tax funding would require the Council to find reductions elsewhere, cut services, utilise reserves or increase Council Tax.

2. Any option which would require the Council to increase levels of support for particular groups of people could have a disproportionate impact on some claimant groups over others.

3. The majority of the options do not support the Central Government initiative of encouraging people back to work.

4. The Council do not consider that it is appropriate to increase Council Tax.

The Council also recognise that one further option to be considered in the future is to undertake a more comprehensive overhaul of the scheme so that Council Tax Support falls under Council Tax legislation as a discount, similar to the existing Single Person Discount.  This may make administration more straight forward.  However, the Council is not proposing to undertake such an overhaul at this stage, nor does it consider that this is an option for the 2015/16 scheme.  If a decision is made to take forward consideration of this possibility for the future (i.e. from 2016/17 onwards), then depending on the nature of the changes, consultation and financial modelling to identify implications to the Council Tax Band may need to take place.

Reasons for decision

Although other options have been considered, the Council is proposing that the scheme for 2015/16 remains the same as the current one in order to support the Government’s initiatives of work incentives and paying due regard to the challenging financial climate we are currently in.

Although it is recognised that this impacts a vulnerable sector of the community there has been a higher than expected collection rate due to the supportive measures introduced, these will continue into 2015/16 and the forecasted income will be built into the Council’s financial plans.  This will enable the Council to maximise income without increasing council tax levels and help to reduce the £70m budget gap.  Further information on this has been explained in paragraph 4.4 and at Appendix D of the report.