Agenda item

Council Tax Reduction Scheme

This report will be presented by Patsy Mellor (Head of Customer Services) and Ian McIntyre.


Councillor Clive Stevens thanked the officers for their response. He noted that someone previously earning £12,500 which increased to £13,000 would keep £100. It was important to ensure arrangements were put in place so that individual claimants did not fall into a benefits trap.


Officers introduced the report and made the following comments:


(1)        Bristol City Council had funded the Council Tax Reduction (CTR) working age scheme in full since its introduction in 2013;

(2)        It was anticipated that the cost of the scheme would increase to £1.6 Million in 2018/19. It was noted that few Councils continued this funding and that Bristol was the only core city to maintain this level of support. Pensioners were protected under nationally prescribed guidelines;

(3)        There were three potential options for future arrangements – (a) continuing under existing arrangements for all working age households (b) maintain a payment of 25% net Council Tax liability for those of working age at an estimated cost of £4.3 Million;

(4)        Introduce an income balance scheme at an estimated cost of £34.8 Million with a gross saving of £6.8 Million against the forecast expenditure in 2018/19;

(5)        It was estimated that recovery costs were between 65% and 75% where these changes had been made with an estimated saving of £5 Million and £4.8 Million for Options 2 and 3 respectively;

(6)        Options would be put forward to Cabinet for the end of June 2017, followed by a consultation period of July to October 2017;

(7)        The national deadline for the scheme was 31st January 2018;

(8)        The level of administration remains in place. A banded scheme would enable administration to be reduced;

(9)        There were no proposed savings in the budget at this time. However, this should not prevent examination of options for the Medium Term Financial Plan. There were clear political decisions to be made in future.


Officers noted that the reference in Paragraph 5 to the Cabinet Decision on 4th July 2017 should read 4th July 2016.


Councillors made the following comments:


(1)        Bristol City Council offered something unique of which the Local Authority should be proud and which should be protected. This scheme should not be reviewed;

(2)        Banding should not be supported as some individuals could end up with a negative income. Under the current arrangements there was only a 70% collection rate for most Local Authorities who have introduced a Council Tax Reduction scheme requiring a minimum payment. The current level of summons of 21,000 applied for all Council tax payers, working on the assumption that the scheme was fully funded at present. It was, however, expected that there would be some increase if any of the unfunded options were implemented. Officers needed to investigate this before carrying out consultation;

Action: Officers to investigate – Ian McIntyre/Matthew Kendall


(3)        One Councillor pointed out that some people of working age held equity in their homes. Officers needed to look at this situation. However, a number of Councillors expressed the view that the number of working age people who were unemployed in this situation was likely to be very small and, therefore, the return would be insufficient for the amount of effort involved, In response, officers pointed out that, in addition to legal constraints with which they were faced, there would be very few people in this situation who were of working age;

(4)        The types of people who received this benefit were surprisingly small. The proposed saving was less than a third. In addition, further options were required to be considered in addition to 25 and 50% savings. Furthermore, recovery costs were not very good – South Gloucestershire and North Somerset had better recovery rates than Bristol. In response, officers stated that 1% would be the maximum impact of changing the scheme on overall Council Tax recovery rates. However the difference was likely to be because there were areas of greater deprivation in Bristol;

(5)        In response to a suggestion that the Discretionary Fund (DF) could be increased, officers pointed out that the purpose of DF was to compensate in certain situations where someone was on a minimum payment;

(6)        In response to a Councillor’s question concerning why national schemes operated in Wales and Scotland but not in England, officers explained that the Wales and Scotland schemes were both funded by the devolved administrations. They confirmed that it was not yet clear how the arrangements would operate after 2020;

(7)        The Council should be proud that it is the only core city that continues to operate this scheme in the way that it does. However, this should not prevent attempts to seek improvements where possible;

(8)        It seemed unrealistic to expect savings of £671 per household in some of the indicated areas ie  Hartcliffe and Withywood. Officers confirmed that any proposed changes would disproportionately affect poorer households as there were more of them in these areas N.B Officers confirmed that this figure was incorrect. There needs to be a total saving of £7.3 Million divided by total working age CTR households of £25,000 which is almost £300 per annum;

(9)        It was important to make clear that people struggling with their Council Tax payments should be protected. However, other ways of delivering on the Council’s objectives had not been considered for a long time and should be reviewed;

(10)      There were a variety of views expressed on any future decision in this area – some Councillors argued for no change, others for none of the 3 options but smaller improvements where possible or for Option 2.

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