Briefing on Local Support for Council Tax

1. Briefing on Local Support for Council Tax David Magor OBE IRRV (Hons) Chief Executive Institute of Revenues, Rating and Valuation

2. Localism and Council Tax Support

3. Council Tax and Localism The Localism Act 2011 More scrutiny on levy Just how far does the proposed power of competence go? Referendum on levels of council tax above stated thresholds Neighbourhoods, Community Councils and Parishes – a new power base? How does all this impact on local support for council tax?

4. Developing the Local Scheme

5. The Universal Credit Award The standard allowance The child responsibility element The housing cost element The limited capability for work element The limited capability for work element and the work related activity element The carer element Childcare costs element

6. SUMMARY– THE KEY STAGES IN THE UC ASSESSMENT PROCESS STAGE 0 – IDENTIFY WHO IS IN THE BENEFIT UNIT (ADULTS, DEPENDENT CHILDREN AND NON-DEPENDANTS) then STAGE 1 – CALCULATE THE UC MAXIMUM AMOUNT (TOTAL ALLOWED FOR LIVING AND HOUSING COSTS) then STAGE 2 – CALCULATE THE ADJUSTED UC AWARD (DEDUCT EARNINGS, CAPITAL, INCOME, BENEFIT CAP) then STAGE 3 – CALCULATE UC ENTITLEMENT (APPLY ANY SANCTIONS, ADD ANY HARDSHIP PAYMENTS) then STAGE 4 – CALCULATE THE UC PAYMENT (ADD ANY ADVANCES, APPLY ANY DEDUCTIONS)

7. STAGE 0 – IDENTIFY THE BENEFIT UNIT One or two ‘eligible (and connected ) adult claimants, and relevant child dependents = The UC Benefit Unit Identify (for Housing Element purposes only) any non-dependants

8. STAGE 1 – CALCULATE THE BENEFIT UNIT’S ‘MAXIMUM AMOUNT’ BY ADDING UP RELEVANT AMOUNTS COVERING…… Standard Allowance Adults Tick indicates available for LCTS Child Element/Disabled Child Additions Children Childcare Element Childcare Carer Element Carer Limited capability for Work Related Activity, or Work Element LCW Housing Element Housing

9. STAGE 2 (a)– CALCULATE THE UC ‘ADJUSTED AWARD’ UC MAXIMUM AMOUNT Tick indicates available for LCTS minus Tariff income from applicable capital minus Other applicable income minus Any earnings (subject to any disregards and taper) And then......

10. STAGE 2 (b)– ‘CALCULATE THE UC ‘ADJUSTED AWARD’ BY APPLYING FURTHER CRITERIA ADJUSTED AWARD stage 2(a) Tick indicates available for LCTS minus Any reductions necessary to take account of the Benefit Cap plus Any increases necessary (where Cap does/will not apply) to take account of Transitional Protection UC ADJUSTED AWARD equals

11. STAGE 3–CALCULATE THE ‘UC ENTITLEMENT’ UC ADJUSTED AWARD Tick indicates available for LCTS minus Any conditionality sanctions (plus any hardship payment amounts) equals UC ENTITLEMENT

12. STAGE 4– ESTABLISH ANY DEDUCTIONS TO BE MADE TO UC ENTITLEMENT TO WORK OUT THE ‘UC PAYMENT’ UC ENTITLEMENT Tick indicates available for LCTS plus minus Any short-term or budgeting advance Any agreed deductions e.g. child support, third party rent payments) and The UC Payment equals

13. Using existing Parameters (The Prescribed Requirements) • Building on existing approaches • The existing structure • Personal allowances • Premiums • Non-dependant deductions • Resources • Disregards • Second adult rebate • Taper • Excess benefit • Forecasting • Formulating the scheme

14. Constraints • System • Funding • Limitation and referendums • Protecting vulnerable groups • Setting aside a sum for extraordinary events • Political dimension • Timetable • Adverse consultation • Collection issues

15. Administering Local Schemes in Accordance with PR • Initial transition • The application • Calculation and award • Notification • Excess LSCT • Appeals • To the local authority • To another body • Arrangements for individuals subject to immigration control or are not habitually resident in the UK

16. Collection Fund Regulations • Possible amendment to the Local Authorities (Funds) (England) Regulations 1992 • Precepts • The proposal to vary the payment schedule • Views being sort from the two groups • The potential for an alternative proposal • The impact of the in-year financial pressure on Major Precepting Authorities

17. Council Tax Base Regulations • Amendment to existing regulations rather than new ones • Calculation of the impact of LSCT on the council tax base • The council tax base for baseline purposes likely to remain gross of LSCT • Timeline

18. Vulnerable People

19. Key Local Authority Duties • The public sector Equality Duty • Equality Act 2010 • Duty to mitigate the effects of child poverty • Child Poverty Act 2010 • Duty to people with disabilities • Disabled persons (Services, Consultation and Representation) Act 1986 • The Armed Forces covenant • Duty to prevent homelessness • Housing Act 1996

20. The Public Sector Equality Duty • The duty • Relevant protected characteristics • Requirements of the Equality Duty • Welfare needs of disabled people • Equality information and engagement

21. Duty to mitigate the effects of child poverty • Co-operate • Understand needs • Develop and deliver a strategy • Equality information and engagement

22. The Armed Forces Covenant • Redress disadvantages • Recognise sacrifices • The obligation of the • Whole nation • State • Treatment of War Pensions and the Armed Forces Compensation Scheme

23. Duty to Prevent Homelessness • Families with children • No blame • People at risk • Vulnerable • The Equality Duty

24. Equality Impact Assessment • Fit for purpose • Data and circumstance driven • Cannot be subordinated, “going through the motions” • Published as part of the consultation process • Adverse outcome? • Potential for Judicial Review

25. The Appeal Process

26. The Process • Notification • Extent of detail • Detailed statements • Appeal to the local authority • Decision • Appeal to another place • The Valuation Tribunal Service • Enabling power already in place

27. Appealing to the VTS • Read the Annual Review ! • Process • Need for regulation? • Practice Statements • Procedure Statements • Sufficient expertise? • Customer friendly? • Is there a capacity issue?

28. The Hearing • Amendment in the Bill • Provision for cases to be heard before a Judge • Evidence of scheme to be formally given? • These are liability appeals • Will there be a crossover with UC appeals? • The big question “what is the potential volume”

29. Managing Risk

30. Risk sharing • Sharing risk through the collection fund • Deficit or surplus in the collection fund • Shared the following year? • Should major precepting authorities be able to influence scheme design? • Varying precepts in year • To reflect collection rates • A new power

31. The risks of localisation • If the current financial crises continues, benefit costs will continue to rise. • Collection performance could suffer significantly with the 10% reduction which will fall largely on working age claimants. • The impact of the reduction in housing costs as a result of housing benefit changes and the cap will have a cumulative affect on the ability to meet council tax and other domestic bills • CTB is currently based on actual as opposed to estimated eligibility. Therefore an increase in the number of claimants will automatically lead to an increase in CTB costs This will expose councils to increased expenditure. • Any cap on expenditure needs to protect local authorities from the burden of increased caseloads.

32. Managing the risk of fraud and error • The consultation document suggests that it is for local authorities to administer support for council tax in as fair and efficient a way as is possible whilst minimising errors and the risk of fraud. • The Department for Work and Pensions will be launching the new Single Fraud Investigation Service (SFIS) in April 2013. • Local authority administration of fraud and error in LSCT should continue, whilst working in partnership with SFIS where the need arises. • In the long term LAs will have to make their own arrangements • The risk of fraud and error should be minimised by effective data sharing across all areas of the public sector. • The Government have yet to realise the potential savings of comprehensive public sector data sharing coupled with effective partnerships with the private sector.

33. Managing the financial risk Billing authorities should be able to share the risk of any scheme across the tiers of administration and with Precepting Bodies Strict budgetary control is necessary to manage the financial risk Managing the Collection Fund and regular reporting will be critical There is however a need for more discussion on how risk is managed across the tiers of local authorities and between central and local government.

34. Collection Issues

35. And finally, collection issues April 2013 and beyond • Collecting residue debt identical to the reduction in LSCT • Collecting small balances from those in receipt of LSCT • Do you apply for a liability order? • If so which remedy do you use? • If the debt remains unpaid how will you prove culpable neglect and/or wilful refusal?

36. And Finally, What is the IRRV doing? • Membership of the Reference Board and the Delivery Group • Partnership with “Destin” on a modelling tool • Partnership with “Coactiva” on a Risk Based Verification tool • Partnership with “Entitled to” on a UC/LSCT calculator • Delivering a “Resource Centre” for LSCT • Developing a Mutual model for residue fraud teams and a social enterprise for UC/LSCT/Benefit advice

38. Consulting on local Council Tax Support schemes David Magor OBE IRRV(Hons)

39. Guidance on how to consult Discussed in Chapter 2 of “Localising Support for Council Tax: A Statement of Intent ” DCLG, May 2012 But it doesn’t say much! In general LAs are free to decide how to approach consultation Government-wide guidance in “Code of practice on Consultation” July 2008 Sets out 7 principles of consultation

40. DCLG guidance from ‘Localising Support for Council Tax - A Statement of Intent’ “before adopting a scheme, the billing authority must in the following order: consult any major precepting authority which has power to issue a precept to it, publish a draft scheme in such manner as it thinks fit, and consult such other persons as it considers are likely to have an interest in the operation of the scheme.”

41. DCLG guidance from ‘Localising Support for Council Tax - A Statement of Intent’ “Although Government’s code of practice on consultation states that normally 12 weeks is appropriate, billing authorities may wish to consider the appropriate length of their consultation depending on the impact of their proposals and the ability to complete the consultation exercise within budgetary timetables. The code of practice indicates that where timing is restricted, for example, due to having to meet a fixed timetable such as a budget cycle, there may be good reason for a shorter consultation...”

42. Code of practice on consultation Guidance describes seven consultation criteria: When to consult Duration of consultation exercises Clarity of scope and impact Accessibility of consultation exercises The burden of consultation Responsiveness of consultation exercises Capacity to consult

43. Code of practice on consultation Criterion 4: Accessibility of consultation exercises • Consultation exercises should be designed to be accessible to, and clearly targeted at, those people the exercise is intended to reach. Criterion 5: The burden of consultation • Keeping the burden of consultation to a minimum is essential if consultations are to be effective and if consultees’ buy-in to the process is to be obtained.

44. A model consultation website • Set out your proposed scheme(s) • Background: new legislation and spending cuts • Potential changes to reduce spending • Principles for a new scheme • Consideration by members (include council papers?) • Examples of what it means in practice • Help to show the effect of proposed scheme(s) through hypothetical example cases • Illustrate in broad terms who is most (and least) affected • Also useful for communicating with members and precepting authorities

45. A model consultation website 3. Calculator to let people see the effect on them • Show the effect of proposed scheme(s) on individual households • Helps to screen out people who mistakenly think they are affected, e.g. pensioners • Early warning of reduced entitlement for affected groups • After consultation becomes a calculator for the new scheme 4. Consultation questions • Last part of the process is to get informed views • Includes the Equality Impact Assessment • LAs often have corporate consultation websites including analysis of responses.

47. Equality Impact Assessments David Magor OBE IRRV (Hons)

48. The Equality Impact Assessment Process: what, why and when? • What is an Equality Impact Assessment ? • What is the purpose of an EIA ? • When are they carried out ? • Who carries them out ? • Why do we carry them out ?

49. What is an equality impact assessment? • Eliminate discrimination • Tackle inequality • Develop a better understanding of the community you serve • Target resources efficiently • Adhere to the transparency and accountability element of the Public Sector Equality Duty

50. What is the purpose of an EIA • Reduce public expenditure in an efficient and fair way • Create strong social and community networks • Remove the obstacles to making things happen.