Consultation on new Council Tax Support Scheme gets underway

Stratford-on-Avon District residents are being asked to give their views on changes to the way help with paying council tax is provided to those on low incomes.

From April next year, the Government is abolishing the national council tax benefit scheme and replacing it with local council tax support schemes. The current scheme is wholly funded by the Government but from next year, the Government funding will be passed to the District Council but will be reduced by 10% (£750,000).  This means that there will be less money available to support people currently eligible for benefit to pay their council tax. 

Every Council will need to decide its own council tax support scheme.

Stratford-on-Avon District Council is proposing that, next year, it will continue to give council tax support in the same way as it currently does through council tax benefits by making up the shortfall from reserves.

Cllr Maurice Howse, Enterprise, Housing and Revenues Portfolio says: “Whilst changes to the welfare system are being made nationally and grant funding is being reduced, we want to ensure that the impact on people who really depend on this benefit is minimised.  It is important that we provide the opportunity for people to have their say in helping to shape the new council tax support scheme and I would encourage everyone to do so.

“Although we are not proposing to make any changes to the current council tax benefit scheme for next year, we still want as many people to contribute to the consultation as possible so that we can then decide how we can best operate the scheme in the long term and arrive at the fairest solution for our local residents.  The Government is passing the responsibility for the council tax benefit scheme to local councils but with significantly less money to run it. We want to hear everyone's views and opinions on this important matter so please take the time to get in touch and tell us what you think."

The consultation documents, questionnaire and further information can be found at www.stratford.gov.uk/benefitchanges and the consultation runs from Monday 3 September until Friday 12 October.  There are also links on the District Council's Facebook (Stratford DC) and Twitter pages (@StratfordDC).

The questionnaire is also being sent to all 3,400 non-pensioner council tax benefit recipients with hard copies being made available for completion at the District Council offices in Stratford-upon-Avon.

Once the consultation period is over, the District Council will review its draft scheme, taking into account public opinion. This final scheme will go to The Cabinet for approval on Monday 5 November 2012 with the final decision on the new scheme going to a special Full Council meeting in November.

Background information

Why is the District Council consulting?
The Government is abolishing council tax benefit and all councils have to replace it with their own scheme, which will be known as local council tax support. The new scheme needs to be agreed by
31 January 2013 and will start from April 2013.

From April 2013 the District Council will be given a fixed budget by the Government for providing council tax support - this means that the District Council cannot claim back all of the money that it currently spends on council tax benefit. The fixed budget will be at least ten per cent less than what is paid out now. Based on the current levels of spending and future forecasts, this means the District Council has to save approximately £750,000 in 2013/14. The amount that needed to be saved is likely to go up in future years if council tax bills increase or if more people claim benefit.

The District Council is consulting on what its council tax support scheme should look like for 2013/14.

The scheme should:-

• be as fair as possible with the budget we have available;
• protect vulnerable members of our community;
• encourage people to work and should not act as a barrier to people finding work

What is council tax?
Council tax is a local tax used to fund council services. It is collected by Stratford-on-Avon District Council but is shared between the District Council, Warwickshire County Council, Warwickshire Police Authority and parish councils, to provide a full range of services – from refuse collection to social services and schools. Council tax is based on the valuation band that your property is in. There are eight valuation bands from A-H.

What is council tax benefit?
Currently households which have a low amount of income pay a reduced or in some cases no council tax through council tax benefit.  Council tax benefit is a means tested benefit that is worked out using national regulations. The District Council claim 100 per cent of the money that is paid out for council tax benefit from the Government. The District Council paid out over £7.5 million in benefit last year to people living in the Stratford District area.

Who will be affected?
The Government has stated that all pension age claimants will be protected from the changes and that no pensioners can be worse off as a result. The Government will be issuing regulations which will tell the District Council how it should calculate local council tax support for pensioners.

This means that only working age claimants will be affected by the changes. The District Council has considered making changes to the existing rules and regulations for council tax benefit but has decided that for now it needs to gather more information to ensure a new council tax support scheme is as fair as possible with the budget available. As a result, for 2013/14 the council tax support scheme will be the same as the existing council tax benefit Scheme. This means that the District Council, along with Warwickshire County Council and Warwickshire Police Authority will find the savings elsewhere to fund the shortfall.

The District Council is also considered funding the shortfall by reviewing the current council tax discounts and exemptions awarded to vacant properties within the district; this includes long term empty homes and second homes. The extra money raised by these changes will be offset against the savings that will be required.

The District Council proposals means that in 2013/14 council tax support will be calculated in the same way as council tax benefit for all residents.  However, the District Council does intend to implement changes to the council tax support scheme from 2014 onwards.