To seek the views of the General overview and scrutiny committee regarding the proposed revisions to the current council tax reduction (CTR) scheme ahead of Cabinet review in October and Council approval in December.

The Director of resources introduced the report, the principal points included:

a.           The background to the abolition of the national council tax benefit system in 2013 and its replacement with a local council tax reduction (CTR) system was explained, as well as the subsequent reductions in central government funding.

b.           Pensioner benefits continued to be protected and the council had discretion on CTR for working age claimants only.

c.           The CTR scheme for 2015/16 gave £4.6m in council tax subsidy to working age claimants.  Reflecting reductions in government support grant, there was a saving requirement of £200k from CTR for 2016/17.

d.           The current CTR caseload profile was: pensioners fully or partially unaffected by the CTR scheme 6,594; and working age claimants 6,738, with approximately 4,500 in receipt of CTR at 84% (the remaining claimants qualified for partial subsidy).

e.           The collection rates for council tax remained stable, with 98.10% achieved in 2014/15; the collection rate was 82.5% for claimants in receipt of CTR.

f.             The report provided a breakdown of the circumstances of 190 sample CTR cases that had received a summons and this showed that 53% were in receipt of Employment & Support Allowance.

g.           Initial responses to the council’s Priorities and budget consultation 2016-2020 prioritised income and savings in the following order (out of 10 proposals for savings): sell our smallholdings estate of 4,500 acres, to reduce our debt repayments; increase car parking charges in Hereford; and reduce the discounts available under the council tax reduction scheme.

h.           Appendix 3 to the report detailed the results of a consultation questionnaire on the CTR scheme and the related proposals for 2016/17.  The proposals were:

Proposal 1 - reducing the level of CTR from 84% to 80% but also increase restrictions to CTR and protect CTR at 84% for certain claimants.

Proposal 2 - reducing the level of CTR from 84% to 80% with no other scheme changes.

i.             The Director of resources said that, informed by the data on summonses, consultation responses and engagement with the Children’s Society, Proposal 1 would seek to maintain CTR at 84% where the claimant was either in receipt of severe disability premium, carers allowance or families with a child under the age of five.  This was expected to deliver £144k per annum. 

j.             To bridge the gap to the saving requirement of £200k, Proposal 1 would involve two additional proposals, to amend CTR from a band D property restriction to a band C restriction and reduce the capital limit to £6k.  Appendix 1 to the report detailed the financial impact of 80% CTR and band c restriction and provided examples.  The Director of resources, acknowledging a point made to him by the Chairman, noted that 327 CTR claimants living in a band D property would see an increase in the amount payable from £254 to £458 but also referred back to the potential protections for certain claimants.

k.           The current capital limit was £16k, reducing this to £6k would mean that approximately 110  ...  view the full minutes text for item 29