Agenda item

To present the proposed Council Tax Reduction Scheme for 2023/24 for scrutiny prior to its consideration by Cabinet and recommendation to full Council on 1^st March 2023

Consideration was given to a report of the Director of Finance which presented the proposed Council Tax Reduction Scheme for 2023/24 for scrutiny prior to its consideration by Cabinet and recommendation to full Council on 1 March 2023.

Members will recall that there is a requirement to have a local Council Tax Reduction (CTR) scheme to support residents of working age on a low income who qualify for assistance in paying Council Tax. The Local Government Finance Act 2012 places 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 2023/24 scheme must be agreed by full Council in line with budget setting and no later than 10 March 2023. For Oldham, this requires the Council to agree a revised 2023/24 scheme at the 1 March 2023 Council meeting. Any proposed change must be subject to prior consultation with the major preceptors (for Oldham this is the Greater Manchester Combined Authority), and with the public. The scheme for those of pensionable age is set by the Government and cannot be changed. The Committee will need to consider whether it is appropriate to change the CTR scheme and as a consequence undertake a major consultation, which would be very time constrained. The Council has provided further relief to CTR claimants via the Household Support Fund, its response to the Cost of Living Crisis, together with other initiatives funded from Council resources. In addition, announced within the Provisional Local Government Finance Settlement on 19 December 2022 was a new Council Tax Support Fund of £100m nationally for 2023/24. The Government expects LocalAuthorities to use the majority of their funding allocations to reduce bills for current working age and pension age Local Council Tax Support (LCTS) claimants by up to £25. Councils can use their remaining allocation as they see fit to support vulnerable households with Council Tax bills and a local scheme will be prepared to ensure the maximum benefit to Oldham residents. On 23 December 2022 it was announced that Oldham’s allocation for this ringfenced grant is £0.573m.

A major consultation exercise undertaken at this point would risk deflecting attention from the successful delivery of other initiatives. Furthermore, the full roll out of Universal Credit (UC) is not yet completed and this adds further uncertainty when assessing the likely impact of changes to CTR relief. The Government has recently delayed the full UC roll out to 2028, but as Oldham was a pilot Authority for the scheme, the movement to the new regime within the borough is more advanced than many other areas.

 Options considered in this report are leaving the scheme unchanged, increasing the maximum relief by 2.5% and reducing maximum relief by 2.5%. A 2.5% change in the relief impacts the overall Council tax collected by some £0.356m but has a marginal impact upon CTR claimants (increasing/reducing the benefit per resident by £0.68 per week).

 In view of the continued uncertainty concerning Universal Credit and the marginal impact of any practical change to the CTR scheme at this stage, it is recommended that the Council maintains the current CTR scheme during 2023/24. This will provide continuity about entitlement to those residents on the lowest incomes and allow time for the impact of the roll out of UC to become clearer.

Members noted that the figures included in the report will change as the financial year progresses and will be updated accordingly in advance of the Council meeting on 1 March 2023.

RESOLVED that the Council Tax Reduction Scheme be unchanged for 2023/24 and therefore be commended to Cabinet.