Agenda item

[Report of the Interim Chief Financial Officer. To be introduced by the Cabinet Member for Finance and Health.] To agree the Council Tax Reduction Scheme Policy for 2018/19. The Council is required to have a local council tax support scheme in place to provide relief for pensioners and low income residents by the 31st January 2018.

The Cabinet Member for Finance and Health introduced the report which set the out details of the review of Haringey’s current Council Tax Reduction Scheme (CTRS) 2017/18 and the recommendations for Haringey’s CTRS for 2018/19 taking into consideration the assessment of options and an Equalities Impact Assessment (EQIA). The scheme remained unchanged and would ask for claimants to pay 19.8% for Council Tax.

 

RESOLVED

 

 To recommend that Full Council:

 

                      i.        Agrees to adopt the CTRS 2018/19 as contained in Appendix C and as summarised in Appendix C which retains the same level of support as agreed since 2013/14 and which remains unchanged from 2017/18 for: pensioner’s claimants to continue to receive support for the payment of Council tax.

 

                    ii.        Agrees claimants in receipt of certain disability benefits to continue to receive support for the payment of Council tax.

 

                   iii.         Agrees all working age claimants Council Tax Support to continue to be capped at 80.2% of Council tax liability. 

 

                   iv.        Notes that an Equalities Impact Assessment (Appendix E) has been undertaken in relation to the CTRS and that the findings of this EIA must be taken into account when making a decision regarding the Scheme for 2018/19.

                    v.        Authority be given to the Chief Finance Officer and the Assistant Director of the Shared Service Centre to take all appropriate steps to implement and administer the Scheme.

 

 

Reasons for Decision

 

The recommendation to retain the current scheme continues to support the Government’s initiative of work incentives and pays due regard to the challenging financial climate we are currently in.

 

In recognition of the vulnerable sectors of society, we have supportive measures in place. It is proposed that these continue into 2018/19. Maintaining the current scheme ensures that these protected claimants will not be further disadvantaged.

 

The Council has had its overall centrally government funding reduced by over 43% in the last several years. This has meant that the Council has had to implement significant service reductions and efficiency savings. Given the level of funding cuts that the Council has had to manage and also that further cuts have been confirmed for future years, it is not possible for the Council to expand the scheme to include protection for other groups.

 

 

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.

 

·         Increase the level of financial support so all customers pay less

 

·         Decrease the level of financial support so all customers pay more

 

·         Protect certain vulnerable groups in addition to those in receipt of certain disability benefits, these include but are not limited to:

                                  i.        Households with children

                                 ii.        Households with a child under one

                                iii.        Households with a child under five

                                iv.        Households with more than three children

                                 v.         Households with a lone parent

 

·         Protect band A-C properties

 

·         Protect claimants who are working but on low income.

 

·         Protect claimants in receipt of Single Person’s Discount

 

·         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.

 

·         Increase Council tax

 

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

 

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

 

                      i.        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 reducing budget, increasing support for Council tax funding would require the Council to find reductions elsewhere, cut services, utilise reserves or increase Council tax.

 

                    ii.        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.

 

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

 

                   iv.        The Council does not consider that it is appropriate to increase Council tax.

 

It is worth noting that method of payment for central government grant funding allocation has also changed since the CTRS was first set up. Several grants, including Council tax benefit support funding being consolidated within the overall Revenue Support Grant (RSG), which makes the proportion allocated to each area harder to identify. RSG funding to the Council continues to face steep reduction - by 2017/18 overall government funding including RSG would have falling by over 43% equating to approximately £75m reduction in real terms since 2011.

 

In April 2016 an independent review of local Council tax support schemes was conducted at the request of the Secretary of State. The recommendations from this are still being considered by central government. Haringey may need to make further changes to its CTRS to reflect any new decisions made by government in response to the independent review. As such the previously considered option of overhauling the scheme so that Council tax support falls under Council tax legislation as a discount, similar to the existing Single Person Discount, has not been taken forward.

 

Other London LAs have changed their schemes over the past several years. A full breakdown of 2017/18 schemes is provided in Appendix B and some summary points are shown below:

 

·         One London Borough (Enfield) changed their scheme this year – the discount rate was reduced to 73.5% from 75%.

·         12 LAs have a higher contribution level than Haringey including Newham and Barking & Dagenham.

·         Wandsworth and Harrow have the highest contribution level at 30% for non-disabled working age claimants

·         9 local authorities protect disabled claimants – either completely or by asking them to pay less than non-disabled working-age claimants including Brent, Croydon and Enfield.

·         7 local authorities fully cover the shortfall including City of London, Hammersmith & Fulham and Tower Hamlets.

 

Haringey’s scheme is comparable with other London LAs and its scheme reflects the need to strike a fair balance between protecting the wellbeing of our residents and recognising the challenging financial situation we are in.