Cabinet asked to endorse new council tax support scheme for Shropshire following public consultation
A final decision, based on the responses to the Council Tax Support (CTS) scheme consultation, will be made by Cabinet on Wednesday 16 January 2013. Shropshire Council’s Cabinet will be asked to endorse the new scheme to help Shropshire residents on low incomes with their council tax payments.
As part of its overall changes to welfare benefit, the Government has decided to change the council tax benefit scheme and has asked all councils to replace it with their own ‘Council Tax Support scheme’. This new scheme must be in place from 1 April 2013.
The Government has also said that it will no longer fully fund the new scheme and plans to reduce the money it gives to councils. In Shropshire, this means an overall reduction of approximately £2.17 million. This reduction in funding means we have had to make some difficult decisions about how much financial help we can give people. It is therefore important that any changes in funding arrangements are handled sensitively, in order to minimise the impact of the introduction of a council tax support scheme.
Following consultation with members of the public, there was an overwhelming majority of feedback from customers and partners supportive of the proposed Option 3 approach as the most equitable scheme to implement. This option will spread part of the Government’s reduction in funding across everyone of working age who qualifies for a council tax reduction and will include a combination of:
• Removal of second adult rebates.
• Increase in the value of non-dependant deductions – other adults in the household to contribute.
• Removal of child benefit and earning disregards – all earnings and child benefit will now be classed as income.
• Reducing the upper capital limit to £10,000 – this means reducing the amount of savings and investments people are allowed to have and still be entitled to claim, from £16,000 to £10,000.
By making the above changes, a person claiming support for council tax payments would on average only receive £1.90 per week less, compared to the £3.50 reduction identified in one of the other options in the report. We will also spread the cost of the CTS scheme across the broader population through:-
• Abolishing second home discounts – currently 10% – to 0%, bringing a saving of £117,000.
• Reducing Class A exemptions (unoccupied / unfurnished requiring structural repair) – currently 100% – for 12 months to 50% – bringing a saving of £116,000.
• Reducing Class C exemptions (unoccupied / unfurnished property) – currently 100% – for 6 months to 25% – and align the long term empty discount accordingly – giving a saving of £822,000.
Councillor Keith Barrow, Leader of Shropshire Council, said:
“We have tried to design a fair and accessible alternative council tax benefit scheme. This is something that we have been forced to do, but we are trying to work round this to protect our most vulnerable. We must make the best of this situation and we feel these proposals strike the right balance.
“We undertook a consultation to find out what the public thought before we finalised our local scheme, and I am very pleased to see that the majority of people responding to the consultation have overwhelmingly supported this option.”
94.8% of the 583 respondents to the consultation undertaken between October and December agreed with the proposed Option 3 of the scheme. Of the 583 respondents, 86.2% agreed to the principle to ensure the impacts of the changes are distributed as fairly as possible. 84.1% agreed to the principle to encourage empty properties back into use by reducing council tax support to owners of empty houses. 84.3% agreed to ensure the impact on everyone is minimal. 63.9% agreed with the principle to make sure we don’t have to collect small amounts of council tax from people on low incomes, and 92.5% agreed that whichever option we choose does not cost more in collection and administration.
Martin Taylor-Smith, Shropshire Council’s Cabinet member for flourishing Shropshire communities, said:
“We want to lessen the impact on those who will be affected by these changes, and ensure that the impact of the enforced changes are as fairly distributed as possible, across a broad range of residents.
“In designing a new scheme we are keen to ensure that we protect the vulnerable and encourage people to find work, by making the system support them better when they move into work.”
We also want to ensure that those impacted by the changes receive clear and consistent information about how and when they will be affected. We’ll tell people what the changes will mean for them personally, what options may be available to them should they wish to make changes to their circumstances prior to April 2013, and who they can contact for help and advice.
If approved, the new scheme will take effect from 1 April 2013.
