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The Implications of Welfare Reform -Local Council Tax Support -the story so far

The Implications of Welfare Reform -Local Council Tax Support -the story so far. Andrew Burton IRRV - Head of Revenues, Benefits & Customer Services Bassetlaw DC November 2012. What the briefing will cover.

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The Implications of Welfare Reform -Local Council Tax Support -the story so far

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  1. The Implications of Welfare Reform-Local Council Tax Support-the story so far Andrew Burton IRRV - Head of Revenues, Benefits & Customer Services Bassetlaw DC November 2012

  2. What the briefing will cover • What is happening to (scrapping of) Council Tax Benefit and -what have we done/still to do at Bassetlaw DC ? • x Bedroom Tax • X Universal Credit • X Social Fund • Practical analysis…20 mins

  3. CTB, what is happening – key messages • 1) From 1st April 2013, there is no more Council Tax Benefit. Councils instead must put in place a locally determined scheme that awards discounts to residents by reference to financial need. • 2) The local scheme will be funded by the Government at a level of 90 per of existing “demand led“ CTB. ……… (continued)

  4. CTB, what is happening – key messages • 3) Pensioners cannot be worse off than they are now under CTB. They are protected and the Govt said this is the only intervention in schemes. • 4) The new local scheme must somehow encourage the journey from welfare to work, the idea being that if councils did more about job creation and unemployment, the 10% saving in CTB would heal itself. • 5) Under the equality duty , must not, disadvantage vulnerable groups. So, some working age groups should not face reductions such as the severely disabled.

  5. Some Bassetlaw DC stats • CTB caseload 2012 -10,500 claimants • CTB spend £9.130m 2012/13 • 10 per cent is >£910,000-£1m with new cases • Pensioner caseload - 5089 • Working age earning- 1881 • Working age IS/JSA 3565 • Existing spend on pensioners £4.3m • Existing spend on working age £4.8m • Expected spend for working age under new scheme £3.9m

  6. What are we doing in Notts ? • MPA and districts in Notts worked together on standard menu of options and framework • But, there is no countywide scheme as Billing Authority must reflect different challenges. • Not all Notts agree to types of change e.g. a weekly liability restriction , Ashfield ,Broxtowe and Gedling said no …. • Council Leaders -involved, informed re menu options and timetable , Difficult choices for members

  7. The million pound drop • LGA Chairman Sir Merrick Cockell said “Councils are being put in a very difficult position. Under the proposed scheme most councils will have to ask people on lower incomes, including the working poor, to pay more council tax than they currently do

  8. Bridging the £1m Drop -Attempt 1 • Use the Council Tax Benefit scheme as basis- but restrict support for Council Tax for working age people yet protect the vulnerable (severe disability and war pensions) • – Everyone pays something including JSA /IS by presenting (in Bassetlaw) 80% of liability for rebating • – Indicative modelling: • Potentially nets £0.7m (cap support at 80%) - £1.003m. (cap support at 75%)

  9. Example………. • Band A ,Harworth charge now £1115.50 • Gets Income support /JSA so rebate pa £1115.50 ie £ 21.39 pw • If only 80 % rebate-able so £21.39 x80% so gets £17.11pw which is £892.26 pa in new support • £1115.50 minus £892.26 = £223.24 or <£19 pm - specifically £4.28 pw to pay . • This element would account for 7/10 of shortfall ( c 700k )

  10. The million pound drop -other adjustments to CTB scheme- common in Notts • Capital limit from £16,000- nets <£0.030m • Scrap Second Adult Rebate for working age (£0.012m) • No backdating awards (£0.020m) • Increase non dep deduction (£0.050m) • Stop ignoring Child benefit (£0.220m) • Stop ignoring income disregards (£0.090m) • Consider vulnerable class • Consider hardship fund • Consulted ………….

  11. BDC Consultation messages • residents with the least money will receive the most help • Support will be distributed as widely as possible among people eligible to claim the discount • The scheme will support people moving into, and on, low paid work. • The scheme will ensure that everyone apart from the most vulnerable will pay something towards Council Tax

  12. Consultation formats • Leaflets /booklets- 22,000 mailshot • On line survey www.bassetlaw.gov.uk • Bassetlaw CAB/A1Houisng / other RSL/2 shires CU/Vol sector, Fin Incl group • Parishes/local councils • Road shows TRA • 8+ weeks 29/8 to 28/10/2012

  13. Wait a minute • Mr Pickles made an announcement first reported in the Times 13/10/12

  14. £100m deal (or no deal?) • Share of £100m is £217, 275 • Conditions apply , mainly IS related cases • Transition, no Income Support /JSA case to be worse off by more than 8.5% • Substantially underfunds the gap • Other changes in attempt 1, can’t apply • Grant can’t be claimed until after scheme deadline 31st Jan 2013 • May need to re do our scheme and consult again • Initial angry reaction…………

  15. A 4 letter word beginning with F • FURY • Meddling • Descending into chaos. Bad thing made worse • During 3rd reading, amendment to review in 3 years and include Council Tax Support in UC • Threw out changes to home alone discounts • Doomed to failure , takes money off poor, lasted 3 years, late central interfering ,labelled poll tax ii • Bad week, that was the last week in October

  16. Consultation responses • Approx 390 • On the 80 per cent- survey is split , disagree said do it lower than 80 per cent • 250 to 90 re Hardship • Count income? – do it excl war widows • Other tweaks - do it said 260/75 • Agree vulnerable do it said 260/50 • 96 per cent from Bassetlaw • 61 per cent not on CTB and mostly under 60

  17. Comments • “I recognise that BDC are required to bring in changes to the system but I hope you are continuing to protest strongly against the rationale behind it ie that poor and vulnerable people should be hit disproportionately hard by the need to make savings” • “MY CONCERN IS THAT YOU WILL NOT BE ABLE TO MAKE THE SAVINGS AND YOU WILL INCREASE COUNCIL TAX BILLS. MIDDLE CLASS WORKERS WILL SUFFER AS USUAL!”

  18. Be positive , it’s November • Royal Assent to LGFA 2012 • Council may decide to revise draft scheme and take the Transitional Grant and accept its conditions • Fund the gap from tax base growth c 500k • New discount powers • We are unlikely to re consult year 1 • Will be consulting for year 2 scheme

  19. Key matters • Collection – est 50 per cent won't pay • Collection costs >£50k more . Need DIRECT Debit • Vulnerable and unknown information • Discount changes- consider the impact • Major publicity on scheme decision Jan/ Feb • Revs staff at full output anyway- year end • Customer impact rent increase and council tax. A huge telephone demand expected

  20. Next few weeks - Hold our nerve • Tax base, MPA and local councils • Empty property council tax • Decide on accepting share of £100m • BDC Weekly scheme and collection approach • CTS scheme by 31/1/13 (20/12/12) • Others • Major member decisions • Unprecedented activity and customer and staff impact to plan for

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