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Agenda Item No. 5

 

The Vale of Glamorgan Council

 

Council : 23 January 2013

 

Report of the Managing Director

 

Council Tax Reduction Scheme

 

Purpose of the Report

1.             To consider to out come of the consultation and equality impact assessment and to adopt the Council Tax Reduction Scheme for 2013-14. 

Recommendations

1.             To note the making of the Council Tax Reduction Scheme and Prescribed Requirements (Wales) Regulations ("the Prescribed Requirements Regulations") by the Welsh Assembly on 19 December 2012.

2.             To note the outcome of the consultation exercise undertaken by the Council on the introduction of the Council Tax Support Scheme.

3.             To adopt the national scheme with the following discretions -

  • that the Council should continue to allow extended payments up to a maximum of 4 weeks;
  • that the Council should continue to disregard War Widow and War Disablement pensions in assessing income for Council Tax Reduction;
  • that the Council should continue to allow backdated benefit for a period of up to 26 weeks.
  • That the council should adopt the minimum requirements specified in the regulations when issuing notification of decisions on council tax reduction.

Reasons for the Recommendations

1  to 3  To enable the Council Tax Reduction Scheme to be approved by Council by 31 January 2013 and be in place for implementation from 1 April 2013

 

Background

2.             At its meeting on 17 December 2012 Cabinet considered the attached report (Appendix A) on the Council Tax Reduction Scheme proposals for consultation and resolved (minute C1940).

(1)    T H A T  the national scheme be adopted with the following discretions -

  • that the Council should continue to allow extended payments up to a maximum of 4 weeks;
  • that the Council should continue to disregard War Widow and War Disablement pensions in assessing income for Council Tax Reduction;
  • that the Council should continue to allow backdated benefit for a period of up to 26 weeks.

(2)    T H A T the scheme is put forward for consultation and for consideration by Council in January 2013.

 

(3)    T H A T in the light of the timescale, the Council’s urgency procedure is used. 

 

3.             The National Assembly for Wales approved the regulations for the council tax support scheme on 19th December 2012.  These Regulations prescribe the main features of the Scheme to be adopted by all Councils in Wales.

4.             There are two sets of regulations, as follows 

  • The Council Tax Reduction Schemes (Default Schemes) (Wales) Regulations, which establish a single national framework scheme which would be imposed on any council that fails to adopt its own scheme by 31 January 2013, and
  • The Council Tax Reduction Schemes and Prescribed Requirements (Wales) Regulations, which set out the national requirements that each billing authority must satisfy and also enable additional areas of local discretion that authorities might wish to implement.

5.             The regulations now include a clause which limits their effect to one year only.  New regulations for 2014-15 and subsequent years will need to be laid by 1 January 2014.

6.             The regulations allow discretion to enhance the process for notification of decisions above the minimum requirements.  It is considered that the national scheme as proposed supports all the information required to notify claimants of decisions

Relevant Issues and Options

Consultation and equality impact assessment

7.             The Council has undertaken consultation on the adoption of the scheme.  Even without the application of any of the discretionary elements, the Council would have been obliged to carry out consultation on the adoption of a scheme, even though the provisions were set by the Welsh Government.  Because of the tight timescales between the making of the Prescribed Requirements Regulations and 31 January 2013 (by which date the scheme has to be adopted), consultation has been truncated to a period between 21 December 2012 and 16 January 2013.  The consultation exercise has been applied by all Welsh Councils and has been based upon the best information available at the time (even though the Local Government Revenue and Capital Settlement 2013/14 and the precise amount of funding for Council Tax support were not known at the time).

8.             The Welsh Government undertook consultation on Providing Support for Council Tax between February and April 2012.  A technical consultation was carried out between 21 September and 19 October on the draft Default Scheme Regulations.  No specific consultation has been carried out nationally on the Prescribed Requirements Regulations.  An Equality Impact Assessment has been carried out and was submitted to the Minster for Local Government and Communities for consideration alongside the draft regulations.

9.             The Council will be required to undertake an equality impact assessment in relation to the decisions to be made regarding the exercise of discretions.  In addition to consultation with existing Council Tax Benefit customers the Council also consulted with local interest groups. 

10.        The outcome of the consultation is attached at Appendix B.  The general conclusion reached from the consultation is that respondents were supportive of the Council’s approach to the areas of discretion.  Where responses include comments about the national scheme, these will be forwarded to the Welsh Government.  Generally comments about the national welfare reforms and changes to council tax support were negative however these changes are outside the control of the council. 

11.        The Equality Impact Assessment form is attached at Appendix C.  Responses to the equality impact assessment were again supportive of the councils approach to areas of discretion.  Although there will be adverse affects connected with the implementation of the scheme, the Authority has to implement the legislation. The effect of the scheme will be monitored throughout the financial year.

Resource Implications (Financial and Employment)

12.        The existing Council Tax Benefit scheme is funded by the Department of Work and Pensions, through Council Tax Benefits subsidy. 

13.        The UK Government has transferred responsibility and resources for Council Tax Reduction to the Welsh Government.  The Welsh Government is funding local authorities, who are responsible for delivering Council Tax Reduction thorough the Revenue Support Grant.  An amount of £222m has been identified for Council Tax Reduction in Wales following the Chancellor’s Autumn Statement.  An amount of £7,946,965 has been allocated to the Vale of Glamorgan Council in the final RSG settlement. 

14.        The estimated expenditure on council tax benefit for the current year is £8,729,829, with a council tax benefit caseload of 11,085 (as at 11 January 2013).  The value of claims paid in respect of working age claims is £5.0m (57%) and claims paid in respect of pensioner age claims is £3.7m (43%).

15.        Based on the maximum liability rate of 90% (as set by the regulations), the current case load (11,085) and existing council tax levels (for 2012-13), the cost of council tax support to run the proposed scheme would be £7,737,441.

16.        The Government funding for the scheme for 2013-14 is £7,946,965.  This allows headroom of £209,524 (2.7%) for increases in expenditure over the current year as a result of caseload and council tax increases.  A 1% increase in expenditure on the scheme is equivalent to £77k.

17.        The Council will need to collect the element of the bill not supported by the scheme.  The Council has factored the estimated impact on collections in to the 2013-14 council tax base which was agreed by Cabinet on 3 December 2012 (minute C1926). 

18.        The costs of exercising the discretions as proposed in the report are estimated as follows-

 

Discretion

Estimate

2013/14

£

 

War pensions disregard

12,000

(Included in figures above)

Extended payments

25,000

 

Backdates

13,000

 

Total

50,000

 

 

19.        It should be noted that the costs of extended payments and backdated awards would be offset against collection losses.  Total costs will be absorbed within the available budget and kept under review. 

20.        Expenditure on Council Tax Reduction will be monitored as part of the Council’s budgetary control and monitoring procedures.  This will be included in the monitoring reports to Scrutiny Committee (Corporate Resources).

Sustainability and Climate Change Implications

21.        There are no direct climate change implications, however, the Council needs to ensure that measures put in place for council tax reduction are financially sustainable.

Legal Implications (to Include Human Rights Implications)

22.        The Council is obliged to make a Council Tax Reduction Scheme under the Prescribed Requirements Regulations.  Although the legislation provides for a default scheme to apply in the absence of the Council making a scheme, the Council is nevertheless under a statutory duty to adopt its own scheme, even if it chooses not to apply any of the discretionary elements.

Crime and Disorder Implications

23.        Future changes to benefit may have implications.

Equal Opportunities Implications (to include Welsh Language issues)

24.        The replacement of Council Tax Benefit with the national support scheme will impact upon many of our low income residents including those in vulnerable groups. 

25.        The Council has undertaken a consultation exercise in the limited time available and allowing for the fact that the full financial impact was not known at the time, such having only been determined by the Welsh Government in the Local Government Revenue and Capital Settlement on 11 December 2012.  The consultation assists the Council in satisfying the public sector equality duty in the Equality Act.

26.        The Welsh Government has compiled an equalities impact assessment following its consultation.  A local equalities impact assessment has been carried out by the Council and this is contained in Appendix B.

Corporate/Service Objectives

27.        The service objective is to administer and pay Council Tax Reduction to eligible claimants

Policy Framework and Budget

28.        The final decision on the adoption of the Council Tax Reduction Scheme is a matter for full Council.

Consultation (including Ward Member Consultation)

29.        The Council has undertaken consultation on the adoption of the scheme.  Even without the application of any of the discretionary elements, the Council would have been obliged to carry out consultation on the adoption of a scheme, even though the provisions were set by the Welsh Government.  Because of the tight timescales between the making of the Prescribed Requirements Regulations and 31 January 2013 (by which date the scheme has to be adopted), consultation has been truncated to a period between 21 December 2012 and 16 January 2013.  The consultation exercise has been applied by all Welsh Councils and has been based upon the best information available at the time (even though the Local Government Revenue and Capital Settlement 2013-14 and the precise amount of funding for Council Tax support were not known at the time).

30.        The Welsh Government undertook consultation on Providing Support for Council Tax between February and April 2012.  A technical consultation was carried out between 21 September and 19 October on the draft Default Scheme Regulations.  No specific consultation has been carried out nationally on the Prescribed Requirements Regulations.  An Equality Impact Assessment has been carried out and was submitted to the Minster for Local Government and Communities for consideration alongside the draft regulations.

31.        The draft scheme was considered by the Welfare Reform Task and Finish Group of the Scrutiny Committee (Corporate Resources).

Background Papers

Directorate records

The Council Tax Reduction Scheme in Wales: The impact assessment for the Vale of Glamorgan; January 2013. 

Responses to consultation

Responses to EqIA questionnaire

 

Contact Officer

Clive Teague

 

Officers Consulted

Nigel Smith - Revenues and Benefits Manager

Maureen Neave - Benefits manager

Paul Russell - Council Tax Manager

Robert Jones - Consultation Officer

Responsible Officer:

Siân Davies – Managing Director

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