Agenda item

Consideration was given to a report of the Director of Finance which set out the proposed Council Tax Reduction Scheme for 2021/22.

The Cabinet Member for Finance and Corporate Green, and the Director of Finance presented the report.

Members were informed that there was a requirement to have a Council Tax Reduction (CTR) scheme to support residents who qualified for assistance in paying Council Tax. The Local Government Finance Act 2012 placed a requirement that each year a billing authority must consider whether to revise its Council Tax Reduction scheme or to replace it with another scheme. Any change to the 2021/22 scheme must be agreed by full Council in line with budget setting and no later than 10 March 2021. For Oldham, this required the Council to agree a revised 2021/22 scheme at the 4 March 2021 Council meeting. Any proposed change must be subject to prior consultation with the major preceptors, such as the Greater Manchester Combined Authority, and the public.

Since 2015/16, the CTR scheme had limited CTR to a maximum of 85% of Council Tax for a Band A property and removed the second adult rebate for those of working age. Following a public consultation exercise in Autumn 2018, the scheme was then amended from April 2019 to introduce a range of changes to the scheme largely aimed at those CTR claimants who received Universal Credit (UC). These included the application of some earnings disregards and treatment of information received from the Department for Work and Pensions (DWP) about UC as a claim for CTR. There were no changes to the CTR scheme for 2020/21.

The number of CTR claimants of working age had increased during the COVID-19 pandemic and this impacted on the level of Council Tax that could be collected by reducing the Council Tax Tax Base. Local Council Tax Support Grant funding of £3.183m had been allocated for Oldham to offset the

impact of increased caseloads on the tax base and this would be allocated to support financial position of the Council for 2021/22.

The economic impact of the pandemic in 2020/21 for those CTR claimants of working age had been partly offset by Government support in the form of the Hardship Fund grant, which offered an additional reduction in Council Tax bills of up to £150. The Council also used the Hardship Fund grant to ensure CTR claimants were not detrimentally affected by the change in Housing Benefit

earning disregard regulations introduced under the Social Security (Coronavirus) (Further Measures) Regulations 2020 (SI 2020/371). This Hardship Fund protection would not be in place in 2021/22.

However, there was continued uncertainty about future impacts of the pandemic for residents and the local economy which would impact on the Council’s ability to accurately model any proposed changes to the 2021/22 CTR scheme.

Members noted that the Council Tax was accounted for in the Collection Fund and had an impact on the General Fund budget of the Council one year in arrears. The Collection Fund challenges created by the pandemic had been acknowledged by the Government and it had allowed Councils to manage the impact of Council Tax (and Business Rates) losses in the Collection Fund

for 2020/21 over 3 financial years rather than one. It had also provided support in 2021/22 in the form of the Local Council Tax Support Grant as well as support for both irrecoverable Council Tax and Business Rates income losses through a Local Tax Income Guarantee for which a sum of £1.000m had been incorporated into the 2021/22 budget. These areas of Government

financial support were important in considering the approach to the CTR scheme for 2021/22.

Having regard to all relevant information, Members were recommended to maintain the current Council Tax Reduction scheme in 2021/22, being mindful

of the aim of ensuring continuity about entitlement to those residents on the lowest incomes.

The Council would continue to maintain a hardship provision for those residents in most need which was currently funded from the Council’s existing revenue budget at a value of £0.144m. The Council would consider its financial position during 2021/22 to assess if further support could be given to those residents in most need and to alleviate the impact of loss of 2020/21 COVID Hardship awards.

Members asked for and received clarification on the following:-

·         The gap between the grant and the Hardship Fund – the difference was explained and led to recommendation (b)

·         The number of residents entitled to a reduction and the impact – the figures were constantly changing, so it was hard to assess the impact at this time. The impact will hit the 2022/2023 budget.

·         Impact of the precepts for Fire Service, Police and Social Care – the GMCA takes a Council took a share of the loss that could not be collected in relation to the Fire Service and Police precept.  The Social Care precept losses must be addressed by the Council.

RESOLVED that:

a)    The Council Tax Reduction scheme be unchanged in 2020/21.

b)    The financial position during 2021/22 be reviewed to assess whether resources could be found to support additional Exceptional Hardship Payments to support those residents in most need in 2021/22 and to alleviate the impact of the loss of COVID Hardship Fund grant awards.