Decision details

Council Tax Reduction Scheme for 2020-2021

Decision Maker: Full Council

Decision status: Recommmend Forward to Council

Is Key decision?: Yes

Is subject to call in?: No


Report on the design of the Council Tax Support scheme that will be introduced from 1st April 2020 and the accompanying Council Tax Support Hardship Policy.


Key Decision identified as Council Tax Support Scheme 2020-2021 in the Notice of Key Decisions published on 4 December 2019.


Recommendation for Full Council – not subject to Call-in. 


Councillor R Mehta, Cabinet Member: Communities & Inclusivity presented the report of the Assistant Director: Customer & Neighbourhood Services which which set out the proposed policies for 2020/21 in relation to Council Tax Support and the Council Tax Hardship Fund. 


The Council provided Council Tax Support (CTS) to around 14,100 claimants, of which 8,331 were of working age. Residents who were of state pension age (a minimum 65 years of age for both men and women) were protected under the Government scheme, in that the calculation of the support they received was set by Central Government. For working age applicants however, the Council Tax Support they received was determined by the Local Authority.  The main objective of the proposed new ‘Council Tax Reduction Scheme’ (CTRS) was to provide greater financial assistance to working age customers within the borough, many of whom were on the lowest income. It had recently become apparent, following close scrutiny of Council Tax collection data, that customers in this group were struggling to afford the Council Tax contribution that they were being asked to pay from their limited income.


The deployment of Universal Credit within the borough by the Department for Work and Pensions (DWP) had also brought challenges, and resulted in the Council needing to change its approach to Council Tax Support. The current scheme was deemed too reactive to very minor changes in an applicant’s income, leading to constant changes in Council Tax liability, resulting in numerous bills being generated for each household, which  could be very confusing.


As a result, the report proposed a move to an income-based grid scheme (also commonly referred to as a banded scheme) without the complexities of a full means test required by the current scheme.  The new scheme aimed to rebalance the distribution of the available funding to ensure that the most financially deprived customers could receive a greater level of support than the current scheme allowed.


A formal consultation regarding the proposed changes was undertaken with residents and key stakeholders between 30 September 2019 and 10 November 2019.  61% of respondents had confirmed their support for the proposed new banded scheme in comparison to 24% who were not in favour.


The proposed new scheme wold still retain a number of  ‘incomes’ that would be disregarded to protect vulnerable residents including Child Benefit, Disability Living Allowance / Personal Independence Payments, Armed Forces Independence Payments, War Widow(er)’s Pension, War Disablement Pension, Carers Allowance, Support Component of Employment and Support Allowance and disregarding the first £20 of earned income


The proposals meant that a number of working age customers would see a difference in their individual awards once the new scheme was applied.  Some customers would see an increase in the level of support received and others would experience a reduction. However, overall this represented a fairer distribution of the funding available, to ensure that the most financially deprived could receive a greater level of assistance than the current CTS scheme allows.


29 Councils were currently operating a similar banded scheme to the one being proposed and reliable information indicated that nearly one hundred Councils were planning to move to a banded scheme in 2020, with more indicating that they would adopt a similar approach from 2021/22, many citing the introduction of Universal Credit as the main driver.


Since 2013 a Council Tax Hardship Fund had been approved each year by Cabinet which had been invaluable in providing additional support to the most financially vulnerable customers.  Within the budget strategy for 2020/21 funding had been identified for the scheme to continue, allowing for additional tailored financial support whilst, residents adjust to the changes in the proposed new Council Tax Reduction Scheme. 


To complement the proposed changes, the Council Tax Reduction Hardship Policy had been redesigned to ensure that personalised financial protection could be awarded to the most financially vulnerable customers.


The scheme received full support from the Cabinet. 




(a)       that the new Council Tax Reduction Scheme attached to the report at Appendix A be adopted for implementation from 1 April 2020; and


(b)       the redesigned Council Tax Reduction Hardship Assistance Policy attached at Appendix B to the report be approved.

Report author: Lee Higgins

Publication date: 08/01/2020

Date of decision: 02/01/2020

Decided at meeting: 02/01/2020 - Cabinet

Accompanying Documents: