Agenda item

The Lead Councillor for Resources introduced a report which provided members of the EAB with information regarding the Local Council Tax Support (LCTS) Scheme to enable them to feedback views in respect of the Scheme.  Officers would utilise this feedback to inform the annual review to create the 2022 Scheme in addition to the proposed separate fundamental review of future options.

Following a consultation press release in September 2020, councillors had indicated that the EAB should consider the 2022 Scheme and officers proposed in their annual report to the Executive on 24 November 2020 that this would occur in May or early June 2021 before any modelling or forecasting took place to allow the EAB to have input at an early stage.

The report and accompanying presentation provided the EAB with further information regarding the complexities and challenges of the current LCTS Scheme and its component parts, and recommended that councillors expressed their views in respect of key areas they would like officers to either leave untouched or look at in more detail.

In his introduction, the Lead Councillor commended the Revenues and Benefits Lead and her team for undertaking the challenging administration of the numerous Government grants designed to support businesses during the pandemic in addition to the team’s core functions.  However, the proposed fundamental review had been paused owing to Covid-19 and the resulting diversion of resources into related initiatives.  Attention was drawn to the issues before the EAB for debate which included whether all residents should pay a contribution towards their Council Tax demand regardless of their personal circumstances.

The Revenues and Benefits Lead presented the report and expanded upon the review of the LCTS Scheme and the fundamental review.  There was a statutory requirement to undertake an annual review of the LCTS Scheme, which had taken place each year since 2013 when the Scheme had been introduced, and the outcome of the current review would be considered by full Council in December 2021 for implementation on 1 April 2022.  The fundamental review of the Scheme would be an in-depth area of work focusing on establishing whether there was an improved option to deliver the Scheme moving forward.  This would include comparing Guildford’s Scheme with those of other local authorities to identify best practice and it was anticipated that the outcome would be reported to a future meeting of the EAB, possibly in 2022, for consideration.

The current LCTS Scheme was based on the Council Tax Benefits Scheme which existed prior to 1 April 2013.  Although 80% of local authorities had asked residents to pay a contribution to their Council Tax bill by 2018 irrespective of their circumstances, this Council continued to provide a 100% discount and 71% of the current working age claimants in the Borough were in receipt of the full discount.

Comparisons had been made to 2020 against the schemes of the other Surrey borough / district councils and some local authorities outside Surrey, which had revealed similarities with differing details.  In recent years local authorities had considered alterative models such as a band of discount scheme which placed applicants into different bands according to their income and / or circumstances and allocated a percentage discount accordingly.  This approach was felt to be simpler to administer.  The main challenges and risks facing this Council were whether to continue with a working age scheme based on the Council Tax Benefits Scheme which continued to be statutory for pension age claimants, or to move to a discount based working age scheme, separating the administrative costs of assessing the LCTS scheme and Housing Benefits, and the difficulties associated with modelling change and accessing data.

The presentation accompanying the report featured examples of different categories of claimants; modelling and forecasting challenges to achieve a balanced scheme that was simple, fair and affordable; and discussion prompts concerning areas to leave untouched and areas to look at in more detail.

The following points arose from related questions, comments and discussion:

·             Although Universal Credit (UC) had not significantly influenced the Council’s LCTS scheme, the basis of which had been formulated in 2012 and taken effect from April 2013 when UC was in its infancy, the Council had sought to mirror some changes the Government had made to UC.  The fundamental review was being driven partly by the roll out of UC, which was electronically assessed each month and, as it was taken into account as an income to qualify under the LCTS scheme, this could result in some claimants having their Council Tax payments recalculated every month.  It was felt that this was an area to leave untouched in order to avoid the onerous and time consuming need for monthly LCTS recalculations.

·             The alternative model of a band of discount scheme being considered by other local authorities constituted a Council Tax discount rather than a benefit scheme.  This approach, which could consist of numerous income bands linked to types of household, would form part of the fundamental review.

·             In terms of designing an LCTS scheme that was simple, fair and affordable, the current scheme was not considered to be simple and it was questionable whether it would be affordable in the long term.  However, the scheme could be deemed to be fair owing to its complexity that enabled it to be tailored to assist in all household circumstances.  Whilst a simpler scheme was sought, this would need to be balanced against fairness and affordability with a view to achieving the best combination to meet local needs.

·             As LCTS Scheme calculations could be complex, possibly involving conversions between weekly, monthly or annual payments, they were based on five decimal places in the interests of accuracy featuring one final rounding of the figures to determine the ultimate amount.

·             Although the Council Tax Benefits Scheme and the local banded discount scheme constituted the two main underlying models upon which LCTS Schemes were based, there was the potential for up to 300 varying individual schemes across the country as every Council Tax collection authority had the ability to set its own scheme to reflect local circumstances.

·             With regard to opportunities for joint working and alignment of LCTS Scheme processes with other local councils, particularly Waverley Borough Council, there were some existing common elements in Surrey schemes such as applying a 100% discount.  Although past work had taken place with a view to agreeing a consistent scheme across Surrey whilst allowing for minor local variables, this had proved to be challenging.  In the event that closer working with Waverley developed, it would be beneficial for the fundamental review to explore Waverley’s scheme in detail to identify any potential for pursuing a partnership approach.

·             There was no evidence, such as substantial complaints, to indicate that the LCTS Scheme was not meeting the needs of claimants / recipients.  Whilst the LCTS Scheme process was complicated, this was also the case with other benefit schemes and it was anticipated that claimants in receipt of other benefits in addition to the LCTS Scheme were accustomed to such complexity and did not consider it grounds for complaint.  There was a local Council Tax Hardship Fund which operated in parallel to the LCTS Scheme and people disadvantaged by the local scheme rules could apply for a hardship award, the eligibility for which was determined on the basis of assessment of applicants’ personal income, expenditure and circumstances.  The Hardship Fund was traditionally under spent each year and this undersubscription indicated that there was not a particular issue with the LCTS Scheme failing to meet residents’ needs.

Having agreed that the main point to be fedback from the Board’s discussion was that the calculation of Universal Credit under the LCTS Scheme should be an area to remain untouched in the interests of avoiding onerous and time consuming monthly recalculations, EAB members were invited to submit any further views directly to the Revenues and Benefits Lead, who was thanked for her report, presentation and work.