To seek the views of the committee regarding proposed revisions to the Council Tax Reduction Scheme.

The Chief Financial Officer presented the report and the following matters were highlighted:

a.       The national council tax benefit system was abolished with effect from 1 April 2013 and Herefordshire Council set up a localised Council Tax Reduction (CTR) scheme.

b.       For 2014/15, CTR support by the council was based on 84% of the applicant’s council tax charge.  The Medium Term Financial Strategy (MTFS) approved by Council in February 2014 assumed reductions in the level of support to 76% in 2015/16 and to 70% in 2016/17.

c.       Comments were invited from the committee on the proposed revisions to CTR for submission to the Leader (Cabinet Member for Corporate Strategy and Finance) and subsequently to Council.

d.       Cumulative surplus had been delivered against the plan in 2013/14 and 2014/15 and it was anticipated that there would be surplus of £211k in 2015/16 which could be used to provide a contribution towards demographic pressures.

e.       Approximately 5,000 residents of working age were in receipt of CTR at the maximum reduction of 84%, with a further 2,034 claimants having financial circumstances which entitled them to partial reduction.

f.        It was reported that the proportion of summonses issued for non-payment of council tax was significantly higher for those in receipt of CTR than those not in receipt of CTR; an additional charge for the cost of summonses was added to claimants’ debts.

The Chairman used his discretion to allow Richard Hadley of Ledbury Town Council to address the committee on this subject.  Town Councillor Hadley made a number of comments, including:

•        there was a high level of concern about this proposal, not just from those directly affected but also the wider community;

•        although public bodies had to look at potential cost savings and revenue generation, he did not consider this proposal to be acceptable;

•        the level of increase in 2015/16 (for a Band D property) for a resident in receipt of CTR would be around £130, representing a significantly higher increase than that for a resident not in receipt of CTR;

•        he considered the proposal unfair and felt that it targeted the poorest sections of the community;

•        claimants had received 100% discount under the national system, so the percentage increases each year were substantial;

•        the proposal contradicted the national strategy of lifting the least well off people out of tax thresholds;

•        Herefordshire had the lowest average earnings in the West Midlands region and some of the lowest in the country;

•        indices of poverty did not take into account the additional costs of living in rural areas;

•        one third of rural households were considered to be living in fuel poverty;

•        the proposal would affect hard working families and individuals, people with disabilities and long term health problems;

•        unemployment was generally low, meaning that CTR claimants were just ordinary people that found themselves in difficult circumstances;

•        information obtained from the council showed that around 7,000 people were facing court summonses, not only resulting in  ...  view the full minutes text for item 28