Agenda item

Each year the Council is required to review its Council Tax Support (CTS) Scheme. This report advises Overview and Scrutiny of the progress of the 2020 annual review and the proposals to maintain the current scheme for 2021-22.

Members considered the Council Tax Support Scheme report presented by Councillor Boden. 

Members made comments, asked questions and received responses as follows: 

1.    Councillor Mason said that we belong to the ARP as equal members but partner rates are set at 8.5% whilst ours is 14% and he asked Councillor Boden the reason for this. Councillor Boden said the decision to change was made in 2013/14 because 8.5% was felt to be not financially viable within Fenland. He added that each partner within ARP has the right to set whatever rates they wish. 

2.    Councillor Booth said that although Councillor Boden mentioned there is an impact on other authorities he felt the report lacks their thoughts on the scheme; although we are the setting authority we need to have a better understanding of the actual impact of the scheme on them.  County Council gets the prime share of council tax we collect but it would be interesting to know the effect on other authorities particularly for future years. Councillor Booth said he also raised the issue of the percentage variance last year and would particularly like to know the implications regarding administration.  

3.    Councillor Boden said it is correct that we do not take into account or consult the other precepting authorities and agrees that is inappropriate, therefore Cabinet would welcome such a recommendation from the Panel. 

4.    In respect of Councillor Booth’s comment regarding administration, Councillor Boden said the difficulty lies in making changes, which are always technical, but once put in place then the administration is relatively straight forward. If it is just having a difference in the discount rate, that is easy to administer. Councillor Boden added that he has already started talking to other council leaders regarding 2022/23 because all are now increasingly aware of the importance of getting this right. Additionally, with our system not having fundamentally changed for seven years, we are out of step with a number of other authorities, Peterborough City Council being one. They have a very different scheme with different allowances and rules and a different discount rate. It will be inappropriate to look at this for 2021/22 because of our attention on COVID-19. 

5.    Councillor Booth said he agreed that a recommendation regarding consultation should be put forward to Cabinet and also he takes on board Councillor Boden’s comment regarding administration. We need to think about the socio-economic impact of changing the rate. For example, where does paying council tax lie in budgeting as a priority for people on limited budgets? This has got to be part of future consideration as it may be a lower priority for some than paying the rent and will impact on our collection rates.

6.    Councillor Miscandlon said he supports the recommendation to talk to other partners in the ARP group. Quoting paragraph 2.4 of the report, he asked Councillor Boden what has been the impact of the COVID-19 pandemic on the number of claimants in Fenland?

7.    Councillor Boden said that the number of working age claimants in Fenland has increased significantly but all councils have seen this increase and had we not made changes then the impact would be worse.  However, this may change once the furlough scheme ends. 

8.    Councillor Miscandlon asked Councillor Boden why Fenland and the other partners within ARP had not worked together before in terms of making the percentages cohesive. Councillor Boden agreed there was a difference regarding the discount but it was relatively minor in terms of the administration of the scheme; however the impact of COVID-19 could now be the trigger for us to ask more fundamental and difficult questions regarding the whole scheme. However this review really needs to be for 2022/23 and not 2021/22 because officers are extremely busy right now. Councillor Miscandlon agreed that the impact of COVID-19 had been difficult for us all to deal with. 

9.    Councillor Yeulett said the recipients of council tax support would be the worst impacted financially as highlighted by Councillor Booth and asked if at the end of the current situation there would be a whole rethink of the scheme. Councillor Boden replied it is not for us to structure council tax support as we are constrained by central Government. He agreed that although we have to be aware of the effect on individuals’ lives, it is also important to remember that it is other council tax payers who pay for the council tax support scheme. Therefore it is a matter of balancing the best interests of everyone.

10. Councillor Booth said he would like to recommend that a working group be set up to look at the complex set of options on offer and to consider the socio-economic impact and matters such as collection rates and how they will be impacted by any of the options being looked at. He said that realistically we cannot make any decisions today as we do not have the data in front of us and this is such a complex matter. 

11. Councillor Mason said that a sub-committee was set up last year to review ARP and perhaps Councillor Booth’s suggestion could be incorporated within that. 

12. Councillor Boden responded that there is a very tight timetable about the setting of the council tax support scheme for next year and as part of that the purpose of O&S is take make a recommendation to Cabinet who are meeting in early August. Today is the opportunity for the Panel to give their input into the decision that Cabinet needs to make. A working party, although a fine idea, is difficult to tie in with the process we are talking about here, which is to determine what should be done about consultation and how we should consult, and that needs to be done at the beginning of August. 

13. Councillor Booth said that he is not proposing the group look into the council tax scheme for this year; we do not have the information to make an informed decision for this year’s scheme so it needs to stay as it is at the moment but the working group should be set up to look at the following year.  

14. Councillor Count said that the partners have a different discount rate to us and that reflects on the ability to pay.  People on Universal Credit are deemed by the system to have enough money to live on so the less they pay in council tax from one area compared to another would expect that it would mean that a greater percentage could be collected from people because they can afford it.  Unfortunately, the reality is that human nature sometimes causes a reprioritising of spending habits which eventually results in non-payment. Therefore to be able to inform our decision we certainly need to look at our collection rate and how that performs against other statistically comparable authorities.

15. Councillor Boden thanked Councillor Count for the interesting and helpful comment.  The discount rate will have an effect on the collection rate but there is not a direct correlation.  Unfortunately there is a relative lack of good quality research at national level to answer that question and we must make up our own minds based on our own experience. Undoubtedly one of the things we would need to take into account is the different collection rate but a lot depends on the effort put in by the collecting authority itself and in order to administer a council tax discount scheme which has a lower amount that is paid it is necessary to spend more money in order to get the collection rate back up. 

16. Councillor Count said mention has been made of the timetable of when we have to make a decision; he has not seen this but when Cabinet come to look at this if they have a representation of that timetable which is written in stone, as opposed to that which can be flexible, then he would suggest they see if they can have more flexibility in their decision making so the information comes through as late in the calendar year as possible. 

17. Councillor Boden said he would be happy for the O&S Panel to make that a recommendation to Cabinet as it is common sense. There are few actual fixed dates in this. We have not been in this position before and so we are uncertain about what the next year will bring and Councillor Count is correct to say we need to give ourselves as a council the maximum amount of flexibility so we have the greatest amount of knowledge we can have about the effects upon both the council and our tax payers of the decisions we make.  There are few fixed dates in this but if we are proposing to make changes then by law the council tax support scheme must be set by 28 February 2021 and if not, then they have to be set by 11 March 2021. The Cabinet Office has suggested that if councils are going to propose a minor change they can have a shorter period of time than 12 weeks for consultation, but we would like to follow the full 12 weeks to ensure we are following the law properly.

18. Councillor Count said part of the discussion earlier was around what our partners think. As leader of the County Council he would suggest that the fairest way of taxation is to spread it across the fairest amount of people and Councillor Boden is quite right to suggest that the people who pay the council tax discount are the council tax payers themselves; it does not come out of our pockets. There has to be nuances and there are specific ideas coming forward for 2022/23 and he thinks additionally we should consider a council tax discount rate for buildings that are bought back into use, so would like to see that incorporated within the list of ideas. 

19. Councillor Boden agreed that is a valid point for the record but it is more about council tax and how it is applied rather than the council tax support scheme. In view of Councillor Count’s other comment this is the time to contact the other council leaders with a view to seeing if there is a widespread feeling that it may be helpful for us to work together collectively to re-examine these things for 2022/23 rather than piecemeal by FDC.

20. Councillor Count said it seems to him that a lot of people go onto Universal Credit than the council tax support scheme; one of the main considerations of Cabinet will have to be its affordability. He thinks that will be a major consideration for Cabinet when they are able to put a best estimate of what that might look like. 

21. Councillor Booth suggested that as Councillor Boden said there have been no studies on the council tax support scheme it may be worth approaching a debt management company such as Step Change. They may have some evidence of how people prioritise the bills they have to pay. Are we going to make a situation worse by changing the discount rate?

22. Councillor Boden said there is a lot of data out there about the council tax support scheme and collection rates but there is not a rigorous and accepted analysis of that data to give correlation between the council tax support scheme discount and the collection rate. So yes, the data is available from those who give support to claimants and is important but we ourselves give information and we try and assist those individuals who have difficulty paying their council tax whether they are in receipt of the discount or not. He would not understate the amount of internal knowledge we already have.

23. Councillor Miscandlon said that as the data is available and there are a lot of statistics, so would it be appropriate for the ARP Board to authorise a study within the area so we all have a better understanding of what is going on. It would be advantageous to Fenland and all other members of the ARP to have that data and he is sure County Council would also appreciate having it available.

24. Councillor Boden said we are talking about an organisation that is spread out over five different collection authorities and three county councils. Also, the four other councils are not our statistical neighbours so some of this data would not be directly attributable to us. If we wish to have a proper study that would have statistical significance, then it would have to be done with statistical neighbours rather than across ARP. It is an academic exercise more than anything and it should be central Government pushing strongly for this.

25. Councillor Miscandlon said therefore would it not be appropriate for the various councils to speak to the MPs and ask them to raise it with Government. Ultimately their access to data is greater than local councils and they could produce figures far more quickly and have facilities we not. 

26.  Councillor Boden agreed this was a sensible suggestion and said this would have far more resonance in six months’ time when local councils begin to realise the potential implications the council tax support scheme may have on their budgets and on their council tax payers next year and possibly years to come.

27.  Councillor Mason said he was getting the feeling that the proposal of no change to the current scheme should be recommended and upheld but maximum flexibility on decision making for future years to be applied.  Also we would recommend that there is more communication with authorities and ARP in order to plan forward for 2022/23.  He added that he would personally like to see that the work of the O&S ARB subcommittee continues and would be happy to take forward any further recommendations.

28.  Councillor Count said his view in recommending that Cabinet looks at how much they can shrink the timetable by in order to come to a decision would be to allow them more flexibility for this year. We have to have trust in the Cabinet and allow them maximum flexibility as we are not in a position to make a recommendation either for a change or not and would just prefer the recommendation to be to say that we have noted the report, it is too early for us to come to a solid recommendation and we ask Cabinet to use its flexibility to the fullest extent. 

29.  Councillor Mason thanked Councillor Count and said that he was referring to the year 2022/23.

30.  Councillor Booth thinks we should be saying no change for this year. He cannot see how we can get all this information although letting Cabinet have flexibility. But if we are talking a 12-week period for consultation and it has to be before the end of February and trying to gather all that information, it is probably unrealistic to achieve it. We will not know the impact of the furlough scheme until October. Therefore we continue with it as is at the moment but start working out now what we need to do for the following year. 

31.  Councillor Mason thanked Councillor Booth and said that is the point he was trying to make.

32.  Councillor Cornwell said he fully supported Councillor Mason’s summary. Remember we are making a recommendation not a decision. It is up to Cabinet, if circumstances change they should at least have the flexibility, which he thinks they still have but it is actually for them to make a firm decision before they come back to us again. He added that he has learned more during this session than many other sessions relating to council tax support over the years and found it to be an extremely good debate with very clear explanations.

33.  Councillor Wicks said he agreed with Councillor Mason’s approach; we are in an emergency situation and have no idea what the end game is. To keep it as it is at the moment and give Cabinet maximum flexibility to do what they have to do is the way forward.

34.  Councillor Count said that it sounds like there is some confusion over what we are recommending. On the one hand we are saying to give maximum flexibility to Cabinet but on the other hand we are recommending a no change scenario for next year and those two statements are incompatible. His recommendation was to accept that we are not in a position, and whilst Cabinet may not be in a position in August, there is a possibility they are going to look at seeing if they can move that to perhaps a month later down the line or further. But the point is even if it is August they will have more information than us today so he is not sure if we can move the formal recommendation as there seems to be some disagreement. We are not the decision makers, Cabinet will be. But if it is not a formal recommendation then he would like to put that forward and as a recommendation and propose that Cabinet be given full flexibility to make their mind up at their meeting. 

35.  Councillor Mason said his proposal was that we recommend no change to the current scheme at the present time but give Cabinet maximum flexibility for the decision making for future years.  Councillor Booth seconded the proposal.

36.  Councillor Booth said that if Councillor Count wished to amend the proposal he would have to do it now.

37.  Councillor Count said he can only make an amendment if it does not substantially change the original motion. The original motion is for no change and his is for maximum flexibility so it is not an amendment but a different proposal.

Proposed by Councillor Mason, seconded by Councillor Booth and AGREED that the Overview and Scrutiny Panel recommend no change to the Council Tax Support Scheme at the present time and that Cabinet be given maximum flexibility for decision making in future years.

Councillor Boden said with the agreement of the Chairman he would listen carefully to the contributions from everyone at today’s meeting and take it all into account.  Councillor Mason thanked Councillor Boden.

(Councillor Count reported a conflict of interest as Leader of the County Council saying this item will have major implications for the County Council.  However, as it is a non-pecuniary interest he will be able to debate fully and will remember which hat he is wearing today).