Agenda item - Council Tax Reduction Review

Extract from the proceedings of the Policy & Resources Committee meeting held on the 5^th December 2013 (to be circulated), together with a report of the Executive Director for Finance & Resources (copy attached).

54.1         Councillor Littman introduced the report which had been referred from the Policy & Resources Committee meeting held on 5 December 2013 to the Council for approval. He stated that the report demonstrated the effectiveness of Officers as it did not propose any changes to the existing scheme. Councillor Littman went onto add all local authorities had been instructed to implement the scheme by Central Government, but it was the view of the administration that the scheme demonstrated a stealth tax on some of the poorest households in the city.

54.2         Councillor A. Norman stated that the existing scheme had been effective due to the efforts of Officers, and the number of Council Tax benefit claimants had reduced by approximately 1000 since January 2013 – saving the Council over £1M – which was good news for those seeking work. She went on to add that the number of job seekers had fallen in the city, and broke this down further to demonstrate that the local authority was performing above the national average. This evidence within the city was proof that Central Government’s welfare reforms were having a real impact locally, and it was noted that the majority of existing Council Tax arrears related to historic cases before the new scheme had been introduced. In closing Councillor A. Norman added that the situation needed to continue to be monitored carefully.

54.3         Councillor Wilson stated that the interpretation put forward by the Conservative Group - that the projected underspend was evidence for justifying a reduction in the 2014/15 budget - was ‘misguided’ as the knowledge of the changes had not been widespread, and families could have been ‘getting by’ in the short-term. It was inappropriate to make assumptions at this point in time and to use this information to take decisions in relation to budget setting that could put people and families at risk as it was the poorest and most vulnerable sections of society were receiving the disproportionate impact of the changes from Central Government. The arguments put forward by the Conservative Group did not ‘stack up’ and reference was made to work commissioned by Kent County Council that highlighted problems such as: increased use of food banks; homelessness and increases to crime in deprived areas. Councillor Wilson summarised that she commended the measured approach taken.

54.4         Councillor J. Kitcat thanked Officers for working to deliver the scheme well ahead of other authorities, and he provided assurance that there would be discretionary funds budgeted as part of the scheme. He went on to highlight that billions were being taken out of welfare nationally, and universal credit was due to be rolled out in 2016/17; the Centre for Economic Inclusion had reported that the city was be one of the worst hit areas with very rates of claimants effected by the changes. In summary Councillor J. Kitcat commended to work of Officers and partner bodies.

54.5         Councillor G. Theobald came back to comments made by Councillor Wilson; stating that the current Government had inherited the economic situation from the previous Labour Governments and stated that the situation was better for the local authority then it had been in the previous year. He reiterated comments made by Councillor A. Norman that the number of claimants had reduced since January 2013, and unemployment was falling with levels of employment rising. He stated that he would support the level of reserve, and noted that the improved position the local authority was now in.

54.6         Councillor Littman thanked Councillor Wilson for her contribution, and added that Officers were working hard to publicise the scheme; in response to comments from Councillors A. Norman and G. Theobald he expressed concern with the direction of welfare reform from Central Government.

54.7         RESOLVED:

(1)         That the proposed Council Tax Reduction scheme for 2014/15 which is unchanged from 2013/14 be approved;

(2)         That the discretionary element of the scheme budget be set at £100,000 recurrently whilst maintaining one-off resources of £100,000 to top it up if necessary.