Agenda item

Report for decision and submission to Council.

ORDERED that the Executive approve the proposed Council Tax Reduction Scheme for 2026/27, as set out in the report, to be forwarded to Council for formal approval.

The Executive Member of Finance submitted a report for Executive consideration which set out the proposed Council Tax Reduction (CTR) Scheme for 2026/27.

Members were advised that the Council had a statutory duty to design and locally fund a CTR scheme each year, with the final scheme required to be approved by full Council no later than 11 March.

The report outlined the minor legislative amendments to be incorporated into the scheme for 2026/27 and explained that increases to income bandings were proposed to ensure that levels of support for low‑income households were maintained.

Members noted how the Council had continued to develop its income‑banded CTR scheme, first introduced in 2022/23 to simplify administration, reduce recalculations, and improve collection rates. The scheme provided discounts of 90%, 72%, 36% and 23%, determined by net weekly income and household composition, and continued to support Care Leavers with up to 100% relief. The report explained that for 2024/25 and 2025/26, band ranges were adjusted to reflect annual inflation increases to prevent reductions in entitlement. For 2026/27, Members were informed that further increases to the income bands were required due to above‑inflation uplifts to Universal Credit scheduled from April 2026 to April 2029, ensuring households maintained broadly the same level of support. It was noted that the Council’s CTR scheme supported approximately 18,500 households, with expenditure of around £22.183 million, and that the proposed adjustments were expected to be largely cost‑neutral, with any minor changes in entitlement being incidental to overall scheme expenditure.

OPTIONS

1.    The Council could reduce the level of support offered to working age residents in receipt of CTR. However, the Council recognises the financial challenges placed on residents and is therefore proposing that the current level of support is maintained which incorporates the proposal to increase the income bandings in line with inflation.

2. The Council could increase the level of support provided by adjusting the income bands and / or the discount rate although this would be subject to a full consultation exercise, which has not taken place during the current financial year. It is therefore intended that the Council will again review the scheme in June / July 2026 in line with government changes in legislation and any proposed local alterations, with Executive approval sought should consultation be necessary.

ORDERED that the Executive approve the proposed Council Tax Reduction Scheme for 2026/27, as set out in the report, to be forwarded to Council for formal approval.

REASONS

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

Council Tax Reduction (CTR) was introduced by Central Government in April 2013 as a replacement for the Council Tax Benefit scheme, which was administered by councils on behalf of the Department for Work and Pensions. 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, has a statutory requirement to revise or design and fund a CTR scheme by no later than 11 March each year which must be approved by a Full Council.