Agenda item

The Executive received a report on the setting of the Council Tax Base for 2017/18 which reviewed the changes to Council Tax made in 2013/14 and the Local Council Tax Support Scheme (LCTSS) introduced in April 2013.

Members noted that there had been an increase in the tax base of 222.58 which would generate an additional income of £39,700 based on the current Band D council tax charge.  The Executive received detailed breakdowns of the calculations of the Tax Base for each part of the Borough and a breakdown of the calculation of the Tax Base for the whole area.

Technical changes to Council Tax had been introduced from April 2013 under the Local Government Finance Act 2012 which meant that the Council was empowered to set a number of changes to Council Tax discounts and exemptions, as well as introduce a premium for long term empty properties. Members noted that, in his Autumn Statement, the Chancellor had announced the ability to amend the current empty property premium to a maximum of 100% from the current maximum of 50%. If the Council wished to adopt this measure, it would need to be agreed by the Council at its meeting in February 2018.

On 1 April 2013 the Council had introduced a new Local Council Tax Support Scheme (LCTSS) to replace Council Tax Benefit, for working age claimants. The new scheme operated as a Council Tax discount and the Council was able to vary the value of discount on Council Tax granted to working age claimants. Pensioner claimants were protected and would continue to receive help towards their Council Tax, based on regulations set by Central Government.

The funding given by Government to fund the new scheme was insufficient to pay the full cost of granting all claimants 100% discount.  Members had taken the view, when setting the scheme in January 2013, that the cost of the LCTSS should not fall on local tax payers and so had set the discount level at 70% for working age claimants, subject to a number of specific exemptions for defined vulnerable groups. Members had also agreed to put £10,000 into a hardship fund for individual cases. 

The Council Tax Support Exceptional Hardship fund, as introduced from 1 April 2013 had a requirement that Council Tax Support must be in payment in the week in which an Exceptional Hardship fund award is made, or the applicant must have been in receipt of Council Tax Benefit on 31 March 2013. The current conditions included the criterion that Exceptional Hardship awards could be made to those in receipt of Council Tax Benefit as of 31 March 2013. It was considered that the passage of time has made this reference obsolete.

The Executive was therefore asked to recommend that the wording be amended to: “Council Tax Support must be in payment, or have been in payment, in the financial year which an award is sought, to ensure the Exceptional Hardship awards can be made to those meeting the set criteria.”

Members were reminded that in 2017/18 the Revenue Support Grant had be reduced to zero and, therefore, it was reasonable to assume that there would be no governmental support for funding the LCTSS. As a result, it was considered likely that the Scheme may need to be reviewed with a view to increasing the amounts claimants pay from the existing 30%; this, however , would need to be balanced against claimants’ ability to pay any additional council tax.

For ease of administration, it was important that there was alignment in respect of treatment of income and calculation of applicable amounts between housing benefit and the local council tax support scheme. Each year the Government made minor changes to its scheme to reflect uprating of benefits etc. In order that the housing benefit and LCTSS remained aligned, it was proposed that the Executive Head of Finance be authorised to make such minor changes as may be necessary to the LCTSS for all types of claimant.

The introduction of the LCTSS in April 2013 had had the effect of reducing the Council Tax base since it operated as a discount rather than a benefit.   In order to recognise the effect that this had on parishes, the Government had provided a grant in 2013/14 to give to parishes to ensure they were no worse off because of the introduction of the LCTSS. This had amounted to £22,923. The grant had again been provided in 2014/15 but, as it had not been separately identifiable, the Council had agreed to reduce the parish element by 13% in line with the overall reduction in funding received by the Council.  It was proposed that no reduction be made in the current financial year. This would also mean that Parishes would not have to increase their precepts in 2017/18 just to cover any grant reduction.

RESOLVED

(i)          to note the calculations of the tax base in Annexes A to F summarised below:

(ii)            to note that the changes to Council Tax discounts made by Executive on 7 January 2014 under the freedoms given in the Local Government Finance Act 2012 and relevant statutory instruments remain unchanged for 2018/19;

(iii)           that £19,943.44 be given to Parishes in 2018/19 to offset the effect on the tax base of the Local Council Tax Support scheme;

(iv)          that the final setting of the Tax Base be delegated to the Executive Head of Finance.

RECOMMENDED to Full Council that

(i)              the Local Council Tax Support Scheme for Surrey Heath, approved by Council on 22 January 2013, remains unchanged for 2018/19;

(ii)            the Council Tax Exceptional Hardship Policy be amended to state that Council Tax Support must be, or have been, in payment in the financial year which an award is sought;

(iii)           the Executive Head of Finance be delegated to make minor changes to the Local Council Tax Support scheme so as to ensure that where applicable to income calculation it remains in line with Housing Benefit changes introduced by legislation; and

(iv)          incomes and applicable amounts and non-dependant deductions are uprated in line with the percentages and amounts supplied by DWP and DCLG, and applied to Housing Benefit claims.