To consider the Council Tax Support Scheme.

Contact: James Walton, Head of Finance, Governance and Assurance. James.Walton@Shropshire.gov.uk

Members considered a report, copy attached to signed minutes, on the Shropshire Council Council Tax Support Scheme 2018 – 2019.

The Head of Finance, Governance and Assurance, and the Revenues and Benefits Service Manager gave a presentation (copy attached to signed minutes) which covered: the background to the proposals; the Council’s Financial Position and current Council Tax Support Scheme; the approach of other Councils; the options being considered; how council tax support is calculated; the effect of the proposed changes; the consultation; discretionary scheme; and council tax collection.

Members asked questions and made comments relating to:

How much of the predicted £1.19m would be delivered at the outset of implementation of the recommended option 4 and how likely it was the collection rate would decrease post implementation; what percentage of a person’s weekly income might the additional cost to them represent; could council tax be taken at source from a Universal Credit payment; was it possible that the cost of collection could exceed the amount collected.

In response to questions, the Director of Finance confirmed that implementation of option 4 would result in an additional saving to the Council of £1.19m.  He explained that it was anticipated that collection rates would decrease to start with and that £600,000 of this additional £1.19m would be gained in the first year.  It was expected that collection rates would gradually improve in subsequent years as experienced by other local authorities following the introduction of a minimum payment.  He confirmed that the change would only apply to people of working age.  Officers also reported on a scenario where £4 a week could come from a person with an income of £73.10 a week.

Jackie Jeffrey, Chief Executive, Citizens Advice Shropshire, was invited to address the Committee.  She circulated the CA’s response to the consultation (a copy is attached to the signed minutes) and drew attention to the concerns raised and steps recommended to ensure those struggling most would be protected.  It was appreciated that the Council was facing difficult financial decisions but CA believed that the proposal would not solve this problem, and that the cost of collecting arrears from those who had been unable to pay would be greater than the amount the Council was able to collect in additional income.  They felt that further research into the impact of the changes was needed and a strategic view formed over how all the Welfare Reform changes would impact on Shropshire Residents.  CA wished to work with the Council to ensure that enforcement action should be affordable and proportionate, and had been pursuing a date to do this for some time, finding it harder to make contact then previously as officers were stretched.  . 

It was confirmed by the Revenues and Benefits Service Manager that a date for this had now been arranged and that flexibility would be possible in negotiating payment plans.  Other CA recommendations included placing accounts on hold whilst encouraging the household in arrears to engage with advice agencies.  It was also felt that the Council should review the operation of the discretionary payment scheme in cases of hardship.

The CA Chief Executive also reported disappointment about, in her opinion, the poor quality of the consultation letter – she felt it was confusing and complicated and the examples of how the changes might impact on an individual’s circumstances were hard to understand. She said she would be able to forward CAB data on the impact of schemes in Cheshire West, Cheshire East and Herefordshire.

Martin Whitelegg, Shropshire Town and Rural Housing explained that some tenants were already in receipt of Universal Credit and in some areas of the County it would roll out further in December with 2,300 tenants eventually being on UC.  This year it was anticipated that there would be £40,000 arrears but it was anticipated that implementation of Universal Credit meant that could escalate to as much as £400,000.  An officer from the Financial Inclusion Team reiterated that implementation of Universal Credit was expected to dramatically increase the level of arrears and impact on people’s ability to pay for food and utilities.  It was felt that a discretionary payment would be essential for a certain amount of time. 

Chris Westwood, Customer Services Manager, explained the Discretionary Housing Payment Scheme which could not be used for Council Tax purposes but might be available to where overall household income would be effected.    Although this would not provide a long term fix it could be a very useful part of a larger scheme. Out of £525,000 available, with £325,000 was currently unspent but the expectation was that demand would increase following implementation of Universal Credit.

During discussion, the Chair said the communications around the consultation should have been better, and it should not be left to other organisations to provide a clear explanation.    Members discussed the possibility of giving three months grace for those transferring onto Universal Credit with payments tapered over the remaining year.    .  

AGREED:

That Citizens Advice provide comparative data from neighbouring authorities

That officers be asked to provide:  

·      real examples of the weekly of income of individuals, and how much Council Tax they     would have to pay following implementation of proposals,

·      more robust information around the costs of collection;    

·      detail of whether it would be possible to use Discretionary Housing Payment

·      Information whether it would be possible to implement a Council Tax grace period of 3 months following transition on to Universal Credit – with payments tapered over remaining months

That the Committee consider this information at its next meeting to form any recommendations and feedback to Cabinet at its meeting on 6 December 2017, in advance of a final decision being made at the Council meeting on 14 December 2017.