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The Background to Local Support for Council Tax

The Background to Local Support for Council Tax. The Government announced in the Comprehensive Spending Review 2010 that support for council tax would be localised The Welfare Reform Act received Royal Assent on 8 March 2012 Mike Bytheway Service Manager Revenues & Benefits. Timetable.

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The Background to Local Support for Council Tax

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  1. The Background to Local Support for Council Tax • The Government announced in the Comprehensive Spending Review 2010 that support for council tax would be localised • The Welfare Reform Act received Royal Assent on 8 March 2012 Mike Bytheway Service Manager Revenues & Benefits

  2. Timetable Autumn-Winter 2011-12 • Government publishes response to the consultation • Introduction of Local Government Finance Bill • Central and Local Government begin working on model schemes Spring 2012 • Primary legislation in passage through Parliament • Government preparing and consulting on draft secondary legislation • Technical consultation on grant distribution Summer 2012 • Primary legislation passed • Secondary legislation prepared • Local authorities designing local schemes, scoping IT changes

  3. Timetable cont’d Autumn-Winter 2012-13 • Secondary legislation passed (early Autumn) • Grant allocations published • Local Authorities establishing local schemes – consultation with major precepting authorities and public, revisions to schemes • Technical changes to systems begin • Local Authorities setting budgets • Local authorities adopt schemes Spring 2013 • Local schemes in operation

  4. Localising Council Tax It is the Government’s view that support for council tax should be localised to: • Give local authorities a greater stake in the economic future of their local area; • Provide local authorities with the opportunity to reform the system of support for working age claimants; • Reinforce local control over council tax; • Give local authorities a significant degree of control over how a 10 per cent reduction in expenditure is achieved; and • Give local authorities a financial stake in the provision of support for council tax

  5. Localising Council Tax cont’d Local authorities have been given the power to design their own local support schemes, either on there own or in partnership, within a set of parameters. These parameters include: • Deliver an operational scheme by April 2013; • Have a process in place for managing legacy council tax benefit which has been abolished in the Welfare Reform Act; • Retaining a local fraud service for the investigation of council tax fraud; • Delivering a 10% reduction in expenditure; • Having a financial contingency in case local support schemes are oversubscribed or there is an increase in pensioner caseloads;

  6. Localising Council Tax cont’d • Protecting pensioners so that they see no reduction in support from current levels; • A continuing requirement to award statutory discounts such as Single Persons Discount; • Local schemes must provide an incentive to get people back into work and align with wider welfare reform; • Considering how to ensure support for other vulnerable groups; • Financial assessment for working age claimants; • Support continues to be applied as a discount to the council tax bill; and • Local scheme to be agreed by Members after consultation with the public and other key stakeholders such as precepting authorities.

  7. Establishing and implementing a local scheme There are key roles in establishing and implementing a local scheme: • Designing and establishing the parameters of the scheme; • Consulting with the public and ensuring precepting authorities have a role in the process; • Feeding into the budget and council tax setting processes • LA’s can make adjustments to the scheme each year, after undertaking a local consultation process;

  8. Establishing and implementing a local scheme cont’d • Billing authorities would be free to come together and coordinate approaches to setting schemes. • Consider how to manage any possible financial pressures / risks; • Billing authorities should be able to share any financial pressure as a result of unexpectedly high increase in demand for support; • Local authorities will be given powers to develop their own local schemes for working age claimants.

  9. Draft Scheme & Modelling • To meet budget requirements and timescale; • Look at designing scheme around existing CTB scheme? Forecasting and data sharing by looking at the impact of changes to:- • Personal Allowances • Premiums • Non-dependant deductions • Disregards • Second adult rebate • Taper Modelling Tool • Free tool from Welsh authorities • Free DCLG tool • Northgate modelling tool

  10. Actions So Far • Set up a Localising Support for Council Tax Working Group • Report to Management Team on a regular basis • Report to Kent Finance Officers • Report to Kent Chief Executives • Report to Kent Forum • Set up a KFOA/Kent Benefit Managers Sub Group • Updated the Leader of the Executive • Report to P&A Committee

  11. Technical Reforms of Council Tax In summary, the changes being contemplated that will impact upon the Localising Support for Council Tax include: • giving billing authorities power to levy up to full council tax on second homes • replacing exemption Classes A and C with discounts, the amount of which would be for billing authorities to determine • abolishing Class L exemption, and making mortgagees in possession of empty dwellings liable to council tax in respect of them • allowing billing authorities to levy an ‘empty homes premium’ in respect of dwellings which have been left empty for two years or more • setting a default assumption that payment of council tax by instalments will be over twelve months rather than (as is currently the case) ten

  12. Vulnerable Groups • Vulnerable groups should be protected as far as possible, as determined locally. There is no agreed definition – in government or elsewhere – of what characteristics make an individual ‘vulnerable’, and no guidance is provided for designing local schemes however account should be taken of the following; • Children and duties under the Child Poverty Act 2010 to reduce and mitigate the effects of child poverty; • Disabled people and duties under the Disabled Persons Act 1986; • Homelessness prevention and duties under the Housing Act 1996 to prevent homelessness, with special regard to vulnerable groups; • Equality Act 2010

  13. Working Age Local schemes must provide an incentive to get people back into work and align with wider welfare reform. • Current Council Tax Benefit Scheme provides disregards for child benefit, child care costs and from earnings • Currently customers in receipt of passported benefits such as Income Support and Job Seekers Allowance Income Based receive full Council Tax Benefit • Currently disregard in full War Pensions

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