Issue - meetings

This paper provides Cabinet with details of the options for a Council Tax Support Scheme for York to be implemented from 1 April 2013.  It asks Cabinet to recommend a scheme to Full Council for approval at its meeting on 13 December 2012.        

RECOMMENDED:       That Council be recommended to approve Option 1, capping council tax benefits at a figure of 70% (as set out in detail in the report), as the Council Tax Support Scheme.

REASON:                     To ensure that a Council scheme is in place before the Governments statutory deadline of 31^st January 2013.

Members considered a report which set out options for a Council Tax Support Scheme (CTS) for York for implementation from 1 April 2013.

Since initial consultation in August 2011, when it had become known that Council Tax assistance would remain a local authority responsibility, discussions and preparation work had been undertaken. Results of the formal 12 week public consultation exercise on the proposed changes had ended on 4 November 2012 with feedback and details of the consultation programme set out at paragraphs 16 to 21 and Annex D of the report.

It was reported that, as the new system went live in April 2013, the Government would reduce York’s funding by 10% based on their estimate of the council’s financial requirements for 2013/14. The likely grant for 2013/14 would therefore equate to a loss of around £1.3m in grant funding. Pensioners however would not be affected by the cut resulting in the percentage of benefit loss to working age customers being much higher than 10%.

Further information on the impacts of protection was set out at paragraphs 9 to 11, work on the development of a local scheme at paragraphs 12 to 15 and details of the comprehensive Community Impact Assessment undertaken at paragraphs 33 to 35.

A financial assessment of the following three main options was reported in detail at paragraphs 25 to 32 and summarised in the table:

Option 1 – Cost Neutral Scheme

Option 2 - Approve accepting the Governments ‘one off’ Transitional Grant (Paragraph 22) and amend the Scheme set out at Annex A of the report to limit any increase to customers on full benefit to no more than 8.5% capping at 91.5% and reinstating the second adult rebate to comply with the Governments rules.

Option 3 - Passing on none of the reduction in grant to customers, with the Council meeting the entire shortfall in Government grant (£1.155m). In taking this option the Council would receive the transitional grant (Paragraph 22) but as with option 2  it needs to be borne in mind that the transitional grant is only a ‘one off’ the cost of both options (2&3) will rise by nearly £250K in 14/15 before any further increase in Council Tax.  The effect of the three options showing the financial impact of each was shown in the table:

Members thanked Officers for their comprehensive report covering complex issues. They referred to the difficult decisions that needed to be made and it was with regret that they had to pass on cuts in Government funding resulting in a tax on the working poor.

Following further discussion it was

RECOMMENDED:      That Council be recommended to approve Option 1, capping council tax benefits at a figure of 70% (as set out in detail in the report), as the Council Tax Support Scheme. ^1.

REASON:                     To ensure that a Council scheme is in place before the Governments statutory deadline of 31^st January 2013.