Decision details

Review of the Local Council Tax Reduction Scheme

Decision Maker: Council

Decision status: For Determination

Is Key decision?: Yes

Is subject to call in?: Yes


The Council is required to review its Local Council Tax Reduction Scheme each year




The Finance Portfolio Holder presented a report, informing Members that the Local Government Finance Act 2012 (as amended) now required Local Authorities to approve their Council Tax Reduction Scheme on an Annual Basis by the 11 March for the following financial year (was previously 31st January).


On 18 December 2012 (Minute C/70 refers), Full Council had resolved to adopt the Default Scheme as prescribed by the Secretary of State as the Council’s Local Council Tax Reduction Scheme to replace Council Tax Benefit from 1 April 2013, with the costs of the Scheme to be funded by reducing Council Tax discount on second homes from 10% to 0%.  The local arrangements for fully disregarding War widows’ pensions, war disablement pensions and Armed Forces Compensation payments were to remain in the calculation of income for the Scheme.


Central Government had previously paid 100% grant to Local authorities under the national scheme, but on the transfer of responsibility, the grant had been reduced to 90%.  South Lakeland District Council, with the support of Cumbria County Council and the Cumbria Police Authority, had met the cost of the 10% grant reduction, about £560,000, by making technical changes to Council Tax.  This had included removing the discount on second homes, introducing a 100% Council Tax on properties unoccupied over six months and a 50% premium on properties empty for over two years.


On 17 December 2013 (Minute C/65 refers), Full Council had resolved that the Local Council Tax Reduction Scheme for 2014/2015 would remain unchanged, subject to the annual uprating of applicable amounts, premiums, etc., in accordance with either the Housing Benefit Scheme Regulations or the Local Council Tax Reduction Prescribed Scheme for pensioners.


Minute C/65 of Full Council on 17 December 2013 had resolved that the next review of the scheme be undertaken in July 2014.  A review had been undertaken on 15 July 2014 by the Overview and Scrutiny Committee which had recommended that the existing scheme which mirrored the previous Council Tax Benefit Scheme was the most appropriate for this Council.


On 19 December 2017 (Minute C/64 refers), Full Council had resolved to maintain the existing Scheme for 2018/19 after having undertaken a comprehensive review of the Scheme during 2014/15.


The Council’s Scheme would still not reflect the changes which had been announced in the Budgets of July 2015 or March 2016, which would adversely affect some of South Lakeland’s residents’ entitlements to support, namely:-


·         removal of Family Premium for new claims;

·         reduction of backdating period from six months to one month;

·         freezing of applicable amounts within Housing Benefit until 2020/21;

·         withdrawal of Council Tax Reduction where a person leaves the Great Britain for four weeks or more;

·         limiting the number of dependants’ additions to a maximum of two (this will apply to all Housing Benefit cases with effect from 1 April 2017);

·         removal of the Employment and Support Allowance Work Related Activity Component; and

·         phasing in of European migrants access to benefits.


As it stood, the implications and the impact of these changes continued to be limited in regard to the overall cost of the Council’s scheme, however, they would be monitored going forward.  Implementation of these national welfare proposals would result in a requirement to undertake a full consultation process as they would be classed as significant changes to the Council’s existing Scheme. This would be considered again as part of the review process for the 2020/21 Scheme.


In the current financial year 2018/2019, awards under the Local Council Tax Reduction Scheme currently totalled £4,979,481 (£4,941,253 in 2018/19).  Although only part way through the current year, the current level of Council Tax Reduction remained broadly similar, despite the significant increases in Council Tax in April 2018.  Providing the economic circumstances remained broadly similar, there was no reason not to expect the level of support to increase greatly, however, further Council Tax increases would increase the upward pressure of the scheme.  The shortfall in Government grant at the introduction of Council Tax Support had been met by a reduction of over 10% in expenditure since the grant level had been frozen at 90% of 2012/13 Council Tax Benefit expenditure (£5.7m).


The report included a breakdown of the caseload and awards in respect of each group at the end of December 2018.


If any changes were considered to the Local Council Tax Reduction Scheme, these could only apply to Working Age applicants.  Only 49% of applicants fell into this category.  This would also trigger the legal requirement to undertake a formal consultation process to amend the Council’s Scheme.


The current Scheme in its present state continued to provide those residents in South Lakeland on the lowest income the maximum amount of support with their Council Tax liabilities.  In common with all other Cumbrian local authorities, maintaining South Lakeland’s current Scheme for April 2019 kept South Lakeland’s position as one of only 37 councils offering a fully funded Council Tax reduction scheme for working age claimants.


In closing, the Portfolio Holder acknowledged that the cost to the Authority of the Scheme was significant, however, supported the Council’s objective of alleviating poverty.  This was not something that the Council had to do, but chose to, in so doing helping to protect the poorest and most vulnerable residents in the District.


The Health and Wellbeing Portfolio Holder thanked the Revenues and Benefits Services Manager for his personal commitment and officers in the Finance Team for their work on the scheme which contributed to the area of health and wellbeing.




RESOLVED – That Council be recommended that the current Local Council Tax Reduction Scheme is the most appropriate scheme for this Council for the financial year commencing 1st April 2019, subject to the Assistant Director Resources (Section 151 Officer), in consultation with the Finance Portfolio Holder, being authorised to:-


(1)        make all necessary updates to this Council’s Council Tax Reduction Scheme to comply with any statutory requirements that may be issued by Central Government;


(2)        make all necessary amendments to the Council’s Council Tax Reduction Scheme to uprate the allowances and premiums in accordance with Revised HB Circular issued in December 2018 by the Department of Work and Pensions; and


(3)        publish the updated scheme in accordance with the Local Government Finance Act 2012.


Reasons for Decision


To assist in the delivery of the Council Plan - “Our Vision” – Several Welfare Reform changes have already been implemented, including the abolition of the Council Tax Benefit Scheme and introduction of its replacement, the Local Council Tax Reduction Scheme. The Council has provided a large amount of information about the ways the changes will affect individuals and worked closely with our social landlords to try as far as possible to reduce the impact on vulnerable people. We will continue to monitor the impact of these changes.


The retention of the existing scheme offering support up to a maximum of 100% of the Council Tax plays a key role in supporting the Council’s objective of helping to alleviate poverty.


Alternative Options Considered and Rejected


The Council is under no legal obligation to offer a Council Tax Reduction Scheme for Working Age residents.  Therefore, in theory, it could reduce the amount of support offered this group from 100% to any figure it chose, including having a full charge irrespective of income.  The vast majority of councils reduce the amount of Council Tax Reduction for Working Age claimants between 8.5% and 25%, resulting in annual charges between £ 100 and £ 300 per annum for those on the lowest income in this group.  All Cumbrian Local Authorities continue have a zero charge for this group.


There are numerous ways in which the current Local Council Tax Reduction Scheme could be changed.  These were fully examined as part of the Overview and Scrutiny review and were considered as part of the decision-making process in approving the scheme for 2015/16.  No further examination has taken place since this review apart from a brief indication of the likely income that could be generated if a minimum charge was to be introduced for Working Age Recipients of Council Tax Reduction.  This was included within the consultation letters issued to the major preceptors in September 2018.


It is likely that a review of South Lakeland’s Council Tax Reduction Scheme will be undertaken in 2019 to assess the impacts on the scheme of the full rollout of Universal Credit in South Lakeland.  It is likely this review will be undertaken as part of a wider Cumbria review.

Report author: Michael Fisher

Publication date: 08/02/2019

Date of decision: 06/02/2019

Decided at meeting: 06/02/2019 - Cabinet

Effective from: 18/02/2019

Accompanying Documents: