Agenda item

(Report of Assistant Chief Executive to be introduced by the Cabinet Member for Finance and Carbon Reduction) To agree consultation proposals with respect to the new Council Tax Benefit Scheme for consultation with the GLA and subsequently residents.

Cabinet considered a report that set out what the Government’s proposals with regard to the transfer of Council Tax support to local authorities from 2013/14 would mean for Haringey and the proposals to mitigate its financial impact.

It was noted that the Government was abolishing Council Tax Benefit (CTB) and requiring local authorities to establish their own systems to rebate Council Tax. This change was coupled with a 10% reduction in the level of funding being given to local authorities for this purpose, which was justified on the basis that the level of claimants would fall; however, in Haringey over the last three years there had actually been an 11% increase in the number of claimants and this trend was expected to continue.  A further factor, that the local scheme would need to accommodate, was the exemption of pensioners from the scheme as the associated funding had also been equally reduced. The factors above culminated in an expected reduction of council tax funding between 18% and 22% and Cabinet noted the projected financial loss to the council as a result of this.

The Cabinet Member for Finance and Carbon Reduction continued to draw Member’s attention to likely impact of the welfare reforms and reductions in housing allowance to families in the borough.

 In response to a question about contingency funds allocated  to respond to the anticipated reduction in Council Tax Benefit subsidy set out in the Medium Term Financial  Plan  in February 2012, it was pointed out that  the legislation on welfare reforms  had  not been passed at this time and  therefore it had  not been possible to fully  calculate the  expected budget pressure. The contingency amount of £4m, related to expected decrease in council tax collection rates.

It was noted that the new scheme would need to accommodate the reduction in funding and must be approved by 31 January 2012 to come into affect by 1 April 2013.

RESOLVED:

1) That the following proposals for consultation with the GLA be approved:

a)      That the Council look to adopt a scheme that would reduce CTB payments for all claimants in line with the reduction in Government grant. In real terms, this will mean a reduction of benefit payments of between 18% and 22%.

b)      As a consequence, that CTB rules are changed to mitigate the financial loss to the Council as follows: (these are listed in Appendix A)

·        Calculate Council Tax reduction allowing savings and investments up to £10k

·        Council Tax reduction not granted if less that £1 per week

2) That it be noted that following consultation with the GLA on the proposals set out above and having considered the GLA’s response:

a)      A draft CTB reduction scheme will be published and consultation on that scheme would be carried out with impacted groups

b)      That the findings of the consultation and an equalities impact assessment would inform the final scheme which will be put to Members to consider at full Council in January 2013.

3) That it be agreed that, with effect from the date on which the provisions in the Local Government Finance Bill at clause 10 (‘Power to determine further discounts for certain dwellings’) and clause 11 (‘Power to determine further discounts’) come into force, the Council Tax exemptions and discounts are also changed to mitigate the financial loss to the Council. These are outlined in Appendix B of the report.