Agenda item

The Executive Member for Finance and Governance submitted a report for Executive’s consideration.

The purpose of the report was to request permission to undertake a consultation (a requirement of schedule 1A of the Local Government Finance Act 1992) with both the public and the major precepting authorities in respect of proposed changes to the Council’s Council Tax Reduction (CTR) Scheme with effect from 1st April 2024.

Executive approval was required to commence consultation on changes to the 2024/25 scheme ahead of the final decision being made by Council at the budget setting meeting on 28 February 2024.

Council Tax Reduction (CTR) was introduced by Central Government in April 2013 as a replacement for the Council Tax Benefit scheme that was administered on behalf of the Department for Work and Pensions (DWP). As part of the introduction, the Government placed the duty to create a local scheme for working age claimants with Billing Authorities.

Middlesbrough Council, as the billing authority, had a statutory requirement to revise or make a CTR scheme by no later than 11 March each year, approved by Full Council decision.

ORDERED that Executive approves the consultation as per Option two in the report, as required by the Local Government Finance Act 1992, with the following:

      I.        the public; and

    II.        the major precepting authorities (Fire Authority and Police and Crime Commissioner).

OPTIONS

Option 1 was to leave the existing scheme in place. This was not recommended because the existing scheme counts allowances for childcare costs in Universal Credit as income, disadvantaging some people who took paid employment.

Options 3 and 4 enhanced or increased the scheme, e.g., to a 95% or 100% maximum discount scheme respectively. This was not recommended because the associated cost (c£3.15 million for a 95% scheme and c£4 million for a 100% scheme) would have been substantial and ultimately present an increased cost to the General Fund budget, a pressure that was considered to be unaffordable given the Council’s current strained financial situation.

Option 5 provided an uplift in the amount of Council Tax Reduction awarded for those in the lower discount brackets, whilst maintaining a maximum support level of 90%. The c£442k cost of this option, however, was also considered to be unaffordable in the Council’s current financial situation.

REASONS

The proposed changes would further assist low-income households and support the collection of council tax whilst remaining affordable for the Council to provide. 

Any changes to the existing scheme, excluding the technical adjustment referenced in the report, were subject to full consultation which would run from 9 October 2023 for four weeks and would inform the scheme from 1 April 2024 (with exception of the care leavers).