Agenda item

Report HOF211 by the Head of Finance.

(Enclosure)

Decision:

1.               Cabinet recommends that Council adopts the proposed scheme for the localisation of council tax support as detailed in the local scheme rules.  The scheme for working age customers to have the following characteristics:

2.                

ii.     80% maximum eligibility for those who do not fall into a vulnerable group

iii.    100% maximum eligibility for vulnerable customers (as defined)

iv.   No restrictions based on size of property or council tax band Carer’s, disabled and war pensioners protected

v.     Inclusion of enhanced working disregards meaning that a certain amount of earnings is ignored in the calculation of support

2.       Cabinet also recommends to Council the following:

i.                 To adopt amendments to the council tax discount and exemption arrangements in relation to Class C (unoccupied and unfurnished) to provide a one month exemption followed by 25% discount for remaining 5 months.

ii.               To adopt   amendments to the council tax discount and exemption arrangements in relation to Class A (in need of structural repair) to provide a 25% discount for 12 months.

iii.             To introduce a 100% charge for properties that have been empty for a period of between six months and two years.

iv.             To introduce an empty homes premium of 150% for those properties that have been empty for two years or more.

Considerations/reasons for decision:

(1)            Report HOF211 and associated appendices from the Head of Finance including the amendments to Schedule 6 and Schedule 8 as circulated at the meeting and the Government changes to the welfare system in relation to Council Tax Benefit.

(2)            The eight week public consultation on the proposed scheme as well as consultation with major precepting authorities including Lincolnshire County Council and Lincolnshire Police Authority.

(3)            Technical changes to the Local Government Finance Act 1992 that allow local authorities discretion in the way that certain exemptions are administered.

(4)            Entitlement to council tax support to be based on a series of locally defined rules.

(5)            Clarifications made by the Head of Finance at the meeting to comments made by the Portfolio Holder for Housing.

(6)            Comments made by Councillor Mrs Linda Neal about what categories the District Council could look at.

(7)            Comments made by all Members thanking officers and their teams for the work done.

(8)            Comments made about the possibility that any changes to legislation following the autumn budget concerning the issue may require an extraordinary council meeting to change the Council’s scheme accordingly.

Other options considered:

Report HOF205 contained details of various other models that had been considered prior to the proposed scheme being approved for consultation purposes. Since this work was completed, on 18 October 2012, the Department for Communities and Local Government published details of a one off additional £100m grant which has been described as transitional grant to aid adoption of local schemes. This would be made available to local authorities who developed schemes which met set criteria.

For the additional funding to be awarded the localised scheme would have to meet the following requirements:

i.                 Those who would be entitled to 100% support under current council tax benefit arrangements pay between zero and no more than 8.5% of their net council tax liability;

ii.                The taper rate does not increase above 25%;

iii.              There is no sharp reduction in support for those entering work.

iv.              There is also a requirement for us not to significantly increase non-dependant deductions

If the local scheme adopted by South Kesteven met these requirements, a total of £20,082 of additional funding would be made available by the government to South Kesteven District Council. This additional funding would only be available for a one year transitional period.

From April 2014 funding levels would be reduced and the affordability of a scheme with the characteristics detailed above would be further brought into question. Additional consultation could be required and further changes to the scheme might lead to more confusion amongst customers about entitlements and as a result, a greater administrative burden being placed onto the Council.

Officers have remodelled the scheme to fit within the government’s proposals by increasing the maximum eligibility for those of working age who are not protected by our scheme. In addition, a range of models have been produced that vary the level of non-dependant deductions, earnings disregards and rates for second adult rebate.

It has not been possible to design a scheme that would not require additional funding to be provided by the district or major precepting authorities. Both Lincolnshire County Council and Lincolnshire Police made it clear in their consultation responses that they would not make any additional funding available due to other pressures. The additional contribution required from Lincolnshire County Council would be significant. It is recognised that with no additional funding being made available it would not be realistic or sustainable for South Kesteven District Council to fund the shortfall for them.