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Localising support for Council Tax 2013-14. David Ponton-Brown Revenues and Benefits Manager Scarborough Borough Council. NAWRA 9 December 2011. Council Tax Benefit replacement 2013-14. What is changing and why Government consultation (DCLG) Likely outcomes and timescale

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localising support for council tax 2013 14

Localising support for Council Tax 2013-14

David Ponton-Brown

Revenues and Benefits Manager

Scarborough Borough Council


9 December 2011

council tax benefit replacement 2013 14
Council Tax Benefit replacement 2013-14
  • What is changing and why
  • Government consultation (DCLG)
  • Likely outcomes and timescale
  • Scheme design parameters
  • Possible options
  • Effects in Scarborough Borough
  • Key decisions to be faced
what is changing and why
What is changing and why
  • Council Tax Benefit (CTB) currently costs the Government £4.8 billion each year
  • As part of Welfare Reform CTB is to be abolished and expected to be renamed as Council Tax Rebate but will not form part of Universal Credit
  • The Government is reducing annual grant payments for Council Tax support made to Local Authorities by 10% of current levels aiming to save £480 million annually
  • The grant will be cash limited
government consultation dclg
Government consultation (DCLG)
  • A public consultation paper ‘Localising support for Council Tax in England’ was issued, open to all but DCLG particularly interested in Local Authorities, relevant Professional bodies (e.g. CIPFA, IRRV) and Voluntary Agencies views
  • Key aspects:
    • Principles of the scheme
    • Establishing and administering Local schemes
    • Funding and administrative costs
    • Transition and implementation
    • Consultation questions
  • Deadline for responses was 14 October
likely outcomes
Likely outcomes
  • Local Authorities will be empowered to create individual local schemes rather than the current national system of CTB. There is a legal duty to run a scheme to provide support for Council Tax
  • This could be means-tested (as now) or target certain ‘vulnerable’ groups
  • Pensioners will receive the same level of support so only changes will be to people of working age
  • Local schemes should support work incentives, and in particular avoid disincentives to move into work
  • Timescale:
    • Autumn/Winter 2011-12 – Government response to consultation and introduction of Local Government Finance Bill
    • Spring 2012 – primary legislation in passage through Parliament
    • Summer 2012 – Primary legislation passed, secondary legislation prepared, Local Authorities designing and consulting on local schemes
    • Autumn/Winter 2012-13 – Local Authorities establishing local schemes, notifying customers of changes and setting budgets
    • Spring 2013 – April new scheme in operation
scheme design parameters
Scheme design parameters
  • Closer working with other North Yorkshire Districts to create a similar framework and avoid ‘postcode lottery’
  • Support for pensioners at current level
  • Ensuring work incentives are supported
  • Reduce and mitigate child poverty
  • Local priorities, e.g. tackling unemployment
  • Identify likely numbers and types of group that may apply
possible options
Possible options
  • Flat rate % cut in entitlement for all existing CTB recipients of working age regardless of circumstances
  • Variable levels of support for working age people linked directly to personal circumstances (e.g. financial, health, disability, family size)
  • Making amendments to earnings taper or premiums to encourage people returning to work
  • Protection of certain ‘vulnerable’ groups
  • Class financial support as a discount or exemption
  • Only make awards up to maximum Government grant amount
  • Make some awards above the grant once exhausted – fund through Council Tax (contingency fund for extreme hardship)
effects in scarborough borough
Effects in Scarborough Borough
  • Council Tax Benefit as at 1 November 2011
    • 12,506 people claiming, 6,301 pension age (50.4% - national average = 46.5%) and 6,205 working age
    • 2010-11 £11.0 million payments from Government (DWP)
    • To meet a 10% saving (£1.1 million) average reduction for working age people would be 21% (19% nationally)
key issues decisions to be faced
Key issues/decisions to be faced
  • Consultation locally – who with and how?
  • Joint/closer working – other NY Districts, NYCC
  • Will the ICT be in place, and at what cost?
  • How can SBC achieve fairness/equality?
  • Should the additional cost burden fall on Council Tax payers generally or directly on those who are financially disadvantaged?
  • Contingencies for rising caseload/demand
  • Difficulties in collecting Council Tax from those in poverty
preferred option
Preferred option
  • Retain current CTB scheme for pension age
    • Means-tested, robust, ICT systems in place
  • Reduce % Council Tax Liability threshold for working age and build in resilience with a lower %, (say 75% for Scarborough) for contingencies – rise in caseload.
    • Fairest model, still means-tested
    • Financial burden is shared with major precepting authorities
    • Same scheme across North Yorkshire, only % differs based on caseload split
    • Does still have implications on collection of outstanding Council Tax