Council received and considered a report introduced by the Mayor regarding the proposed Local Council Tax Support Scheme which had to be determined by 31 January 2013 for implementation with effect from 1 April 2013.
The Executive at its meeting held on 11 September 2012 had agreed five principles in respect of the new scheme. Details were provided of the outcome of the consultation exercise around such principles which was undertaken between 14 September and 7 December 2012 a summary of which was provided in Appendix A of the report submitted.
The proposed Local Council Tax Scheme included the following:-
Proposal 1 - As the consultation results supported the view to pass on the reduction in funding to Council Tax payers, a 20% reduction in Council Tax Support for people of working age should be applied for which it had been estimated would offset the reduction in government funding by £1.8 million.
Proposal 2 - Through targeting people on low incomes, Second Adult Rebate, which was based on the income of adults who were not liable for Council Tax in their own right, would be abolished which would offset the reduction in government funding by £34,000 per year.
Proposal 3 - Over 65% of the responses to the consultation had indicated that the new scheme should incentivise work. The preferred option was for an increase of £5 for the earnings disregarded from all assessments which would support those entering employment. If the earnings disregarded were increased by £5 it would cost the Council £11,000 in additional support paid to claimants.
A further option available to the Council from 1 April 2013 to help meet the shortfall in funding was to limit the Council Tax exemptions /discounts currently applied.
Proposal 4 - The Council had the opportunity to remove discounts entirely as outlined, in line with neighbouring Teesside authorities which would generate additional income of £880,000.
Proposal 5 - In relation to second homes it was confirmed that at present a 50% charge was payable. To ensure that this did not lose impact it was proposed that a full charge be payable from 1 April 2013 the impact of which would generate an additional £18,000 per year.
Proposal 6 - Legislation allowed authorities to charge a premium for properties which were empty on a long term basis (2 years or more). It was recommended that a 150% charge be applied to such properties, which was in line with other Tees Valley proposals.
The report provided a summary of the overall financial impact of each of the proposals. It had been estimated that based on the current number of claimants the level of Council Tax Support provided to the Council would be reduced by £2.4 million. Should the proposals be approved the net financial impact on the Council would be a net saving of approximately £321,000 which would be available to mitigate future service budget reductions.
It was reported that at the Individual Executive Decision-Making Meeting by the Mayor held on 7 January 2013
Proposals 1 to 6 had been approved and that authorisation be delegated to the Director of Strategic Resources to finalise the scheme for submission to the Department for Communities and Local Government.
Moved, seconded and ORDERED as follows:-
1. That the impact of the Government's funding cuts on Council Tax Support as outlined be noted.
2. That Proposals 1 to 3 as outlined in respect of the Local Council Tax Support scheme be approved.
3. That Proposals 4 to 6 as outlined in respect of the existing Council Tax discounts and exemption schemes be approved.
4. That authorisation be delegated to the Director of Strategic Resources to finalise the scheme for submission to the Department for Communities and Local Government.