Agenda item - Council Tax Reduction Scheme and review of Council Tax locally defined discounts and premia for 2017/18

Referring to minutes 80 of 3 November and 103 of 1 December 2015, to seek authority to consult on a draft Council Tax Reduction Scheme for 2017/18 and on changes to the council tax discount for properties in need of or undergoing structural repair.

RESOLVED

(1) That the Head of Finance and Governance Services be authorised, following consultation with the Cabinet Member for Finance and Governance, to prepare and consult upon a draft 2017/18 council tax reduction scheme as proposed in appendix 1, to be brought back to Cabinet in November for recommendation to Council.

(2) That the Head of Finance and Governance Services be authorised, following consultation with the Cabinet Member for Finance and Governance, to consult on the changes to the Prescribed Class D discount for 2017/18 as proposed in appendix 2.

(3) That council tax discounts proposed in appendix 3 be brought back to Cabinet in November for the 2017/18 financial year.

(4) That the principle of making a grant to Parish Councils in relation to the council tax reduction scheme be continued in 2017/18.

(5) That Parish Councils be advised that it is the Council’s intention to phase out the grant over the years 2017/18 to 2019/20.

Referring to minutes 80 of 3 November and 103 of 1 December 2015, the Cabinet considered the report circulated with the agenda (copy attached to the official minutes).

Mrs Hardwick introduced the report, explaining that the Cabinet’s approval was sought to:

· Consult on a new Council Tax Reduction Scheme, set out in full in Appendix 1

· Consult on changes to the Council Tax Discount scheme in relation to properties in need of or undergoing structural repair (known as Prescribed Class D properties)

· Prepare plans to phase out the council tax reduction grants to parish councils from 2017/18.

She reminded the Cabinet that the national council tax benefit scheme had been replaced in 2013 by local council tax reduction (CTR) schemes. National rules still applied to pensioners, but local schemes affected working age claimants. This Council’s scheme had been virtually unchanged since first localised in 2013. It provided an important safety net for people on low incomes, but it was important to review the scheme to ensure it was well targeted, minimised disincentives to work and provided the best value for money for the benefit of all tax payers. Therefore, in this year’s obligatory annual consultation it was proposed to consult on some possible changes to the CTR scheme. These were set out in Appendix 1 and covered adjusting the qualifying property bands and adjusting the percentage reduction across recipients.

The separate consultation on changes to the 100% Council Tax Discount for properties in need of or undergoing structural repair would explore whether there was any sound justification for this class D discount, whether and in what way changing it would affect the supply of housing and whether there would be any welfare impacts in reducing the discount that might outweigh the economic benefits from increasing the revenue.

The grant to compensate parishes for tax base lost since 2013 as a result of localisation of CTR was under ongoing review as the District Council’s own funding was falling away as Revenue Support Grant disappeared. The current intention was that, as central government support tapered away and was due to fall to zero after 2017/18, the Council should reflect this in a tapered reduction to the parish grants, with the grant ceasing from 2020.

The Chairman pointed out that the Council’s income from Business Rates was also at risk.

In answer to a question, Mrs Christie (Revenues Manager) explained that there was no legal definition of what constituted structural repair, and current decision making relied on previous case law. She went on to explain that for Chichester District Council, decisions regarding the definition of what constitutes structural repair represent the majority of appeals to the Valuation Tribunal.

Mrs Taylor welcomed the consultation on the Class D discount, pointing out that this had to apply for a full year, and it was quite possible to build a house in that time. The possible reduction in the discount would encourage owners to complete repairs quickly.

Mrs Keegan asked how Chichester’s scheme compared with those of other councils, pointing out that some of the options would not result in a significant increase in revenue to the Council but could have serious consequences for individuals. Mrs Hardwick agreed that comparative information would be provided when the results of the consultations were reported back to the Cabinet in November.