Agenda Item 8
COUNCIL TAX SUPPORT WORKING PARTY
Minutes of a meeting of the Council Tax Support Working Party held on 24 October
2012 in Meeting Room 1, Council Offices, Holt Road, Cromer at 10.00 am.
Working Party:
Mrs A Claussen-Reynolds, Ms V Gay, Mr W Northam, Mr R Oliver
and Mr D Young.
Officers in
Attendance:
The Head of Finance, the Revenues and Benefits Services
Manager, the Benefits Manager and the Democratic Services
Officer (ED)
18
TO RECEIVE APOLOGIES FOR ABSENCE
None received.
19
DECLARATIONS OF INTEREST
None
20
MINUTES
The minutes of the meeting held on 15 August 2012 were agreed.
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FEEDBACK FROM THE NORFOLK GROUP
The Head of Finance introduced this item. She explained that there had been a
meeting the previous Friday involving representatives from District Councils, Norfolk
County Council and the Police. The meeting focused on the announcement made the
previous day regarding a £100m transitional grant available for one year to support
local authorities in developing a sustainable council tax support scheme and assist
them in managing the impact of the funding reduction on the most vulnerable
residents.
Most local authorities within the region had completed the consultation or were close
to completion. The general feeling amongst the Norfolk Group was that although the
announcement of the grant funding was late, the schemes had not yet been finalised
so there was still an opportunity to take it into consideration. She added that the
establishment of a Hardship Fund may not be so key with the additional funding now
available.
Members discussed the update:
1. The Chairman asked if there was any information available on how other
schemes would be operating across the region. The Head of Finance said that
North Norfolk had the biggest reduction of all the authorities at 30% because of
the ratio between working age tax payers and pensioners. All authorities, with the
exception of Norwich City Council, were consulting on a reduced discount.
2. Ms V Gay commented that she had understood that it had been agreed early on
that the Norfolk authorities would work together on introducing a county-wide
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24 October 2012
Agenda Item 8
scheme but that this had been discounted. The Revenues and Benefits Services
manager replied that the Norfolk authorities had agreed on certain principles but
there were difficulties in introducing a Norfolk-wide scheme – mainly due to
demographics. In response to a further question from Ms V Gay asking whether
there were difficulties in taking this approach due to political differences, the
Revenues and Benefits Services Manager reiterated that ultimately it was due to
demographic differences. She added that Government guidance was to keep the
scheme simple and this would be difficult if a shared scheme was implemented.
3. Mrs A Claussen-Reynolds asked if the schemes proposed by other Norfolk
authorities differed significantly from each other. The Revenues and Benefits
Services Manager said that they had all reduced the amount of capital taken into
consideration and taken out the second adult rebate. A few had decided to take
child benefit into account, although in some cases this would not include children
under 5.
4. Ms V Gay asked whether working age people would always be at a disadvantage
once the scheme was introduced. The Revenues and Benefits Services Manager
said that they would under schemes of this kind.
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CONSULTATION
The Revenues and Benefits Services Manager introduced this item. She explained
that the Council had undertaken a thorough consultation which included information
in the local press, a letter to all parish councils (included with the precept letter)
posters, information on the Council’s website, a letter to those likely to be affected by
the proposals, leaflets to social landlords, drop in sessions at Cromer and Fakenham
and a meeting with Victory Housing. A total of 955 people completed the survey, with
670 providing a written response to the question regarding the impact on individual
households.
Members discussed the consultation process and the responses received:
1. Ms V Gay asked whether it would be possible to see the original responses. The
Revenues and Benefits Services Manager said that although hard copies of the
responses had been retained, the Monitoring Officer had advised that the
information should not be shared as personal data was included within the
documents.
2. Mr R Oliver sought further information on the people who gave a written
response. The Revenues and Benefits Manager said that only a general
summary of the responses could be given and it was not possible to provide a
detailed analysis of the respondents themselves. . In response to a further
question from Ms V Gay regarding the number of respondents in favour of the
proposals, she confirmed that it was less than 10.
3. Mr D Young asked whether initial problems with the link on the website had been
corrected. The Revenues and Benefits Services Manager confirmed that it had.
4. The Chairman commented that the large number of responses received indicated
that the consultation had been successful in reaching those affected.
5. Mr D Young was interested in responses from the parish and town councils to the
consultation as he was not aware of any of the parish councils in his ward
covering the issue in any detail. . The Revenues and Benefits Services Manager
said that only one response had been received. She added that Member Briefings
had been arranged for District Councillors to ensure that they were aware of the
proposals and could then inform their parish and town councils.
6. Mrs A Claussen-Reynolds asked whether there was any additional detail
regarding responses to the question on reducing the limit on savings to £6000.
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24 October 2012
Agenda Item 8
The Revenues and Benefits Manager replied that there was no further information
available as the announcement regarding the transitional grant had superseded
many of these issues.
7. Ms V Gay queried whether the Citizens Advice Bureau (CAB) had responded to
the consultation. The Revenues and Benefits Services Manager said that they
had been aware of the process as they had attended a workshop discussing the
localisation of council tax in Norwich. It was not possible to tell if they had
submitted a response to the Council’s consultation. Mr D Young added that he
had concerns about their involvement as the Dereham Watton and Holt CAB said
they had not been consulted.
The Benefits Manager said that under the current system, under 25 non-dependants
paid a contribution to the householder responsible for paying the council tax. At
present this reduction was a standard percentage but there was an option of making
it a standard £10 payment which would simplify matters.
Mr D Young responded by saying that £10 was a considerable sum to find from the
job seekers allowance. The Benefits Manager agreed that it could be argued that this
approach was inequitable as the amount of benefits received by people varied
widely.
Ms V Gay said that she was disappointed that she was not able to look at the original
copies of the responses. The Chairman suggested that Ms V Gay and any other
Member of the Working group could see the responses in private at NNDC so they
would have "first hand" flavour of the responses, if the Monitoring Officer was in
agreement. Ms V Gay thanked him.
The Chairman thanked officers for all their hard work on the consultation process.
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FINANCIAL UPDATE
The Head of Finance explained that the initial savings target of £1.175m had been
based on the previous funding announcement. This had been looked at in terms of
growth and subsidies. Having taken into consideration the current caseload and the
latest growth forecast, this had now been revised down to £1.094m. However, this
figure did not take account of the proposed transitional grant. If the transitional grant
was taken into account, together with scheme reductions (as per Government
criteria) the shortfall would be revised to £634,000. There was a possibility that by
taking advantage of proposed council tax reforms the shortfall could be reduced
further to £224,000.
The Head of Finance stressed that certain criteria would have to be met to apply for
the grant and applications could not be submitted until after the 31 January 2013,
(once the scheme had been finalised). She added that as the billing authority, the
District Council must apply for the grant funding on behalf of all the major preceptors.
Members discussed the financial update:
1. Ms V Gay sought clarification that a requirement of the transitional grant was that
those currently entitled to 100% support under existing council tax benefit
arrangements would not have to pay more than 8.5% of their net council tax
liability. The Revenues and Benefits Manager confirmed that this was the case.
She added that problems might occur if a new claimant joined after 1st April or
experienced a change of circumstances. She confirmed that 2,100 people in
North Norfolk were currently in receipt of full council tax benefit. The savings of
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Agenda Item 8
£264,000 were an estimate as there had been very limited guidance from the
Department for Communities and Local Government.
2. The Chairman queried how the Council would bridge the shortfall if they opted to
apply for the transitional funding. The Head of Finance replied that there was an
opportunity to meet some of the shortfall via council tax reforms – in particular
second homes and an empty homes premium. This could potentially generate up
to £410,000. In response to a further question from Mr R Oliver, she confirmed
that this was based on increasing council tax liability to 95% on second homes.
3. Mr D Young said that he believed up to £506,000 could potentially flow back to
the Council if council tax on second homes was charged at 100%. He said that
even with a 100% charge there would be no disincentive to declare second
home-ownership. The extra 10% charge would gain NNDC 0.9% of council tax on
the complete stock of second homes. If second homes were subsequently misdeclared as normal residences, the Council would lose their 20% pass-back from
the County Council but we would only lose the 09.% when such mis-declarations
reached 4.5% of the total stock of current and new second homes. Since the
Council starts off by knowing the current stock, keeping a record should not be
difficult. It was likely that it would take many years before mis-declarations
reached 4.5% of the total, by which time the scheme was likely to have changed
several times. He therefore favoured a 100% charge. Ms V Gay agreed with him.
The Head of Finance said that a move to 100% council tax liability for secondhome owners could lead to more properties moving over to business rates.
Taking into account business rate relief, there was the potential that the Council
could then lose out. The Revenues and Benefits Services Manager added that
there was a fluctuation in the number of second homes which should be taken
into account.
4. Ms V Gay asked why the Council needed to know how many second homes
there were in the district. The Revenues and Benefits Services Manager said that
they did not if they were collecting 100% of the council tax liability, however, the
Housing team did need to know for setting policy and the allocation of resources.
The Head of Finance added that the County Council currently gave a proportion
of the second homes income back to the Council and this would be difficult to
calculate if there was no record of the number of second homes.
The Chairman reminded the Working Party that they needed to decide whether they
wished to apply for the transitional grant. It was only available for one year but this
would give them some time to consider how they could bridge the funding gap in the
future. He sought clarification as to whether the Council needed to consult with the
County Council if they decided to apply for the transitional funding and put the 8.5%
scheme in place. The Head of Finance confirmed that they would but that there was
no requirement to consult with the public again as it would be an improved scheme.
Mr D Young asked whether opting for the 8.5% scheme would over-ride all previous
calculations. The Revenues and Benefits Services Manager confirmed that this was
the case.
The Head of Finance outlined the options for the Working Party:
a) To continue with the scheme that was consulted on and take an additional
£100,000 out of the budget.
b) To apply for the transitional grant in the knowledge that it was for 1 year only and
recognising that £58,000 would need to be delivered from next year’s budget.
Council tax reforms gave the Council some discretion and could potentially
deliver additional income but the share would be minimal as the additional cost of
collection would need to be factored in.
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Agenda Item 8
The Chairman asked whether it was possible for calculations and scenarios to be
provided based on the transitional scheme, if the Working Party agreed in principle to
this option. The Head of Finance agreed to this.
Ms V Gay said that she felt that it was preferable to opt for the transitional scheme,
even though there was minimal detail available at this stage. She had always
advocated taking other sources of income into consideration – particularly during the
first year. Mrs A Claussen-Reynolds agreed.
The Head of Finance said that she would set out all the options for the Working Party
to consider. It should be acknowledged that the late introduction of the transitional
scheme had impacted on the timetable for approving a scheme and it may be
necessary to hold a special meeting of Cabinet, Overview and Scrutiny Committee
and Full Council in January 2013 to ensure the Council met the deadline. The
Revenues and Benefits Services Manager added that there were several other
welfare changes for working-age people being introduced over the coming months
and if the impact of this scheme could be limited in any way then it could reduce the
overall impact of the wider changes.
It was agreed that officers would need to do additional work pending further
information from the DCLG within the next two weeks. The Group expressed a
preference to recommend a scheme that would enable the Authority to access the
additional grant. The scheme would need to reflect the Government criteria, primarily
that no-one currently entitled to 100% support would pay more than 8.5% of their net
council tax liability.
The Meeting closed at 11.15 am.
Chairman
Council Tax Support Working Party
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24 October 2012