The Interim Head of Finance presented a report, the purpose of which was to provide Council with information regarding the implementation of the 2020-21 Council Tax Reduction Scheme (CTR) and to set out the requirement for Councils to adopt a CTR scheme by 31 January 2020, together with the funding implications.

The Interim Head of Finance reported that CTR provides assistance for those on low incomes with a liability to pay Council Tax.  The Welsh Government has developed a single nationally defined scheme set out in regulations for the provision of Council Tax support in Wales.  The Council adopted the CTR for 2019-20 in accordance with the Council Tax Reduction Schemes and Prescribed Requirements (Wales) Regulations 2013, which will end on 31 March 2020.  There were currently 13,423 households receiving CTR, 8,445 of these were of working age and 4,978 were of pensionable age.  Of the 13,423 households receiving CTR, 10,017 were entitled to a full CTR reduction. 

The Interim Head of Finance reported that the CTR scheme in Wales is set by regulations made under Schedule 1B of the Local Government Finance Act 1992 (as inserted by the Local Government Finance Act 2012).  The

Council Tax Reduction Schemes (Prescribed Requirements and Default Scheme) (Wales) (Amendment) Regulations 2018 had now been laid and made amendments to:

·         Ensure that opposite sex civil partnerships are treated on an equitable basis with opposite sex and same sex marriages, and same sex civil partnerships, in consequence of the Civil Partnerships, Marriages and Deaths (Registration etc.) Act 2019;

·         Provide for the introduction of a specific, statutory entitlement to parental bereavement leave in consequence of The Parental Bereavement (Leave and Pay) Act 2018.

·         Update references to the Immigration (European Economic Area) Regulations 2006 with references to the Immigration (European Economic Area) Regulations 2016.

·         Provide that a number of rights to reside (established for nationals of European Economic Area states in connection with the UK’s withdrawal from the EU) are not relevant rights to reside for the purposes of establishing habitual residence.

The Interim Head of Finance stated that the new regulations did not contain any significant changes from the claimants’ perspective to the current scheme, and the maximum level of support that eligible claimants could receive remained at 100%.  She explained the limited discretion given to the Council, to apply discretionary elements that were more generous than the national scheme as follows:-

·         The ability to increase the standard extended reduction period of 4 weeks given to persons after they return to work (where they have previously been receiving CTR that is to end as a result of their return to work);

·         Discretion to increase the amount of War Disablement Pensions and War Widows Pensions which is to be disregarded when calculating income of the claimant; and

·         The ability to backdate the application of CTR with regard to late claims prior to the new standard period of three months before the claim.

The Interim Head of Finance reported that the Council is required to adopt a CTR Scheme regardless of whether it applies any of the discretionary elements.  If the Council fails to make a scheme, then a default scheme shall apply.  The Council can only apply discretion if it makes its own scheme under the Prescribed Requirements Regulations. 

The Interim Head of Finance reported that consultation on the Prescribed Requirement Regulations was undertaken in 2016 and the results detailed in the Head of Finance’s report to Council on the Council Tax Reduction Scheme on 11 January 2017.  As it was proposed not to change the discretionary elements, a further consultation exercise had not been completed.  It was proposed that the discretionary elements remain as follows:

·         The extended payment period is maintained at the minimum standard of 4 weeks.

·         War Disablement Pensions and War Widows Pensions are fully disregarded when calculating entitlement to CTR. The estimated cost of this proposal within the financial year is £11,100.

·         Backdating is maintained at the minimum standard of 3 months.

The Interim Head of Finance reported that the total estimated cost to the Council for these three proposals is £11,100 for 2020-21.  The Interim Head of Finance informed Council that it must consider whether to replace or revise its CTR scheme and is obliged to make a scheme under the requirements of the Prescribed Requirements Regulations.  The obligation is a statutory duty and applies even if the Council chose not to apply any of the discretions available to it.  She stated that the Council's recommended approach to the available discretions is to apply the recommendations in Table 1, in paragraph 4.23 of the report.  There is no additional funding to bridge any gap and each authority will be expected to meet any shortfall. 

The Interim Head of Finance reported that the Council is required to adopt a scheme by 31 January 2020 under the Council Tax Reduction Schemes and Prescribed Requirements (Wales) Regulations 2013, regardless of whether it chooses to apply any of the discretionary elements.  If the Council fails to make a scheme, then a default scheme will apply under the Council Tax Reduction Schemes (Prescribed Requirements and Default Scheme) (Wales) (Amendment) Regulations 2013.  The Interim Head of Finance informed Council of the financial implications of the scheme in that the 2020-21 Provisional Local Government Settlement shows that the sum provided for CTR across Wales is at the same level as 2019-20.  This Council’s 2020-21 provisional settlement from Welsh Government includes £13.184 million to fund the CTR scheme, an increase of £104,000 from £13.080 million in 2019-20; this amount does not take into account any increase in council tax charges but is distributed based on expenditure on council tax reduction schemes in previous years and is unlikely to change in the final settlement.  Based on the current caseload the estimated total cost of the scheme for 2020-21 is around £15.3 million (including the cost of the discretionary elements), which is £2.116 million higher than the funding provided by Welsh Government.  The proposed budget for 2020-21 is currently £15.254 million, which includes additional funding to meet the proposed council tax increase in the MTFS.  Whilst this was currently considered to be sufficient to meet demand, it will be kept under review throughout the MTFS period.  

RESOLVED:           That Council:

(a)         Noted the Council Tax Reduction Schemes and Prescribed Requirements (Wales) Regulations 2013, and the 2014 to 2020 amendment regulations 

Adopted the Council Tax Reduction Scheme 2020-21 scheme, set out in paragraphs 4.18 to 4.23 of the report.