Agenda item

This report presents the outcome of the consultation process undertaken on proposed changes to the Local Council Tax Support (CTS) scheme 2025-26 and seeks Cabinet approval to recommend the proposed changes to Full Council on 27 February 2025.

In considering the report Cabinet noted the following comments made by Councillor Lorber (who had requested to speak on the item).

Councillor Lorber began his remarks by highlighting the significant impact he felt the proposed changes to the Council Tax Support Scheme would have on local residents already struggling as a result of the cost-of-living crisis. In considering mitigations to the impact of the proposed changes, he suggested that the Universal Credit system should not be used as the basis of the backdating rules for new CTS claims as the system was not felt to work effectively.  In considering the report, Councillor Lorber felt that there had not been enough time to make residents aware of the changes to allow them to make any necessary adjustments, with concerns expressed about the extent and meaningfulness of the consultation process given the preferred option which had been identified as the basis of that process following the initial modelling undertaken.  In highlighting the response provided as part of the consultation by Brent Citizens Advice, Councillor Lorber concluded by urging Cabinet to consider as minimum increasing the level of the financial hardship Support Fund for residents from £1.5m to £3m.

Having noted the representations received, Cabinet RESOLVED to approve and recommend the following changes to the Council Support Scheme for consideration any approval by Full Council on 27 February 2025:

(1)        That the revised Local Council Tax Support (CTS) Scheme for 2025-26 incorporate the following changes: introduce a standard 35% minimum payment for working age households and apply a percentage reduction to each of the income bands. This means all CTS claimants would be expected to contribute a minimum of 35% towards their Council Tax liability. Their CTS would then be calculated based on their income and that would determine which income band they feel into. This would reduce the cost of the scheme by £7.6m with detailed explanations and calculations, number of residents impacted and the proposed weekly reduction in CTS outlined in Appendix A of the report.

(2)        Simplification of the non-dependant charges incorporating two flat rate non-dependant deductions for most households with other adults living in the property, £8 per week for non-dependants “out of work” and £20 per week for non-dependants “in work”. This would remove the need to verify income for non-dependants for CTS claims and reduce the administrative burden. Adopting this proposal would reduce the cost of the scheme by £0.7m with detailed explanation and calculations of the proposed non-dependant deduction, number of households affected and proposed weekly reduction in CTS support outlined within Appendix B of the report.

Technical and administrative changes

(3)        To note that the amendments to CTS scheme would include the Universal Credit notification received from DWP for Council tax, as start date of claim for Council tax reduction if there was entitlement to it.

(4)        To note the alignment of the backdating rules for new CTS claim with the Housing Benefits and Universal Credit regulations i.e. for a maximum of one calendar month. The backdating request is made at the time of submission of a new claim. This change would reduce the administrative burden, and customers would not lose out as the start date would be accepted as per DWP notification date to start date of entitlement. In exceptional circumstances, the Council would consider revising the claim for more than a month e.g. bereavement of close relative.

(5)        To note that the income bands for households was reviewed every year in line with the Consumer Pricing Index (CPI) from September of previous year to be considered for the new financial year.

(6)        To note that a review and update of section 13A policy for hardship fund for Council tax, including an additional £1.5m fund to support residents, would be considered at the March 2025 Cabinet meeting.

Eligible for call-in: No (report and recommendations referred to Council)

Prior to considering the report, Councillor Muhammed Butt (as Leader of the Council) advised that he had accepted a request from Councillor Lorber to speak on the proposals being presented for consideration in relation to the Council Tax Support (CTS) Scheme. In addressing Cabinet, Councillor Lorber began by highlighting the significant impact he felt the proposed changes to the Council Tax Support Scheme would have on local residents already struggling as a result of the cost-of-living crisis. In considering mitigations to the impact of the proposed changes, he suggested that the Universal Credit system should not be used as the basis of the backdating rules for new CTS claims as the system was not felt to work effectively.  Councillor Lorber also felt there had not been enough time to make residents aware of the changes to allow them to make any necessary adjustments, with concerns expressed about the extent and meaningfulness of the consultation process undertaken given the preferred option which had been identified as the basis of that process, following the initial modelling undertaken. In highlighting the responses provided as part of the consultation, including those by Brent Citizens Advice, Councillor Lorber ended by urging Cabinet when considering the proposals and impact locally to consider, as a minimum, increasing the level of the financial hardship Support Fund from £1.5m to £3m.

Having noted the comments and representations made, the Leader then moved on to invite Councillor Donnelly-Jackson (as Cabinet Member for Housing & Resident Services) to introduce the report from the Corporate Director Partnerships, Housing & Resident Services detailing the outcome of the consultation process which had been undertaken on the proposed changes to the Local Council Tax Support Scheme and seeking approval to recommend the final changes outlined to Full Council on 27 February 25 for formal adoption.

In presenting the report, Councillor Donnelly-Jackson began by highlighting the challenging financial context within which the proposals being presented for consideration had needed to be developed involving the Council having to deliver a range of essential demand led services amidst rising costs and growing financial pressures. This had led many local authorities, including Brent, to have to re-evaluate every aspect of spending in order to identify where the greatest efficiencies could be unlocked enabling the Council to achieve more with less.  Whilst recognising that Brent remained in a relatively robust financial position, it was pointed out the Council had still been required to review all areas of spending and deliver significant savings in order to be able to deliver a balanced budget.  The growing costs identified in relation to the current Council Tax Support Scheme had been identified as one of the resulting areas in which it would be possible to make changes that would not only alleviate the administrative burdens of the scheme but also deliver significant cost savings that would enable the Council to continue providing support for other vital services and the most vulnerable residents.

In recognising the important role of the Council Tax Support scheme in supporting many households across the borough and challenging nature of the proposed changes outlined, members were advised that the scheme had reached a point at which it was no longer affordable to deliver in its current form given the projected cost totalling £35m, which involved nearly 20p from every £1 collected in Council Tax being provided in the form of Council Tax Support.  Whilst acknowledging the impact of the proposed changes, the opportunity was also taken to highlight the way in which operation of the scheme had also reinforced the need for urgent reform of the overall system of local government finance (including Council Tax) with the approach being developed by the government, on which further announcements were anticipated as part of the next spending review, therefore welcomed.  In noting that the growing cost associated with provision of local Council Tax Support Schemes was also an issue being reviewed by a many other local authorities (regardless of political persuasion) across London, members were advised that the proposals relating to the operation of Brent’s scheme had been designed to focus on the working-age element. In confirming that the pensioner element of the scheme would remain protected members were advised that the changes for the working-age population would include designing the scheme with a standard 35% minimum payment and simplified non-dependant charges with more residents therefore required to make a contribution towards their Council Tax bill.

Having outlined the proposals for which approval was being sought, Cabinet was reminded these were not being put forward as a matter of choice but out of necessity, with the changes designed to address a £5m shortfall in the Council’s budget which would otherwise have required the use of reserves (no longer recognised as a sustainable approach) or cuts to other frontline services in order to deliver a balanced budget.  In recognising the impact which the proposed changes were likely to have on affected households members also noted the additional measures which had been developed to provide targeted support for those most in need. These had included the reinvestment (from the savings identified) of £1.5m into a hardship fund alongside the existing programme of proactive outreach and support designed to ensure eligible residents were aware of the financial advice, welfare support, and discretionary reductions that were available to them with the changes also providing an opportunity to better integrate the scheme with the Universal Credit system which, over the longer term, it was pointed out would also help to streamline the process and make it more accessible for those already receiving welfare support.

In ending her introduction, Councillor Donnelly-Jackson felt the changes outlined reflected the delicate balance needing to be achieved in seeking to meet the Council’s broader aims to secure the Council’s financial sustainability whilst also targeting support where it was needed most across the Council in order to work towards a fairer and more financially sustainable future for Brent.

In recognising the challenging nature of the financial position faced by the Council as context within which the proposals had needed to be developed, members also acknowledged the efforts being made to ensure those households most in need would continue to be supported. The concerns raised in relation to the regressive nature of Council Tax and need for fundamental reform of the funding system for local government were also supported along with the ongoing efforts being made to lobby for the necessary change and longer term funding settlements.

All those involved in developing the proposals and package of additional supporting measures were thanked for their efforts, with members having recognised the difficult nature of the decision to be made and views expressed as part of the consultation undertaken with residents and key stakeholders in relation to the impact of the proposed changes.  In commending the efforts made to engage with those most likely to be affected, members highlighted what they felt to be the importance in ensuring that any alternative proposals put forward had been subject to the same process, recognising the need to protect those in greatest need whilst also achieving the required balance in terms of delivering a sustainable and balanced budget.

Having noted the discretionary nature of the funding provided for the scheme and efforts being made to safeguard the most vulnerable residents, Cabinet RESOLVED to approve and recommend the following changes to the Council Tax Support Scheme for consideration and approval by Full Council on 27 February 2025:

(1)        That the revised Local Council Tax Support (CTS) Scheme for 2025-26 incorporate the following changes: introduce a standard 35% minimum payment for working age households and apply a percentage reduction to each of the income bands. This means all CTS claimants would be expected to contribute a minimum of 35% towards their Council Tax liability. Their CTS would then be calculated based on their income and that would determine which income band they feel into. This would reduce the cost of the scheme by £7.6m with detailed explanations and calculations, number of residents impacted and the proposed weekly reduction in CTS outlined in Appendix A of the report.

(2)        Simplification of the non-dependant charges incorporating two flat rate non-dependant deductions for most households with other adults living in the property, £8 per week for non-dependants “out of work” and £20 per week for non-dependants “in work”. This would remove the need to verify income for non-dependants for CTS claims and reduce the administrative burden. Adopting this proposal would reduce the cost of the scheme by £0.7m with detailed explanation and calculations of the proposed non-dependant deduction, number of households affected and proposed weekly reduction in CTS support outlined within Appendix B of the report.

Technical and administrative changes

(3)        To note that the amendments to CTS scheme would include the Universal Credit notification received from DWP for Council tax, as start date of claim for Council tax reduction if there was entitlement to it.

(4)        To note the alignment of the backdating rules for new CTS claim with the Housing Benefits and Universal Credit regulations i.e. for a maximum of one calendar month. The backdating request is made at the time of submission of a new claim. This change would reduce the administrative burden, and customers would not lose out as the start date would be accepted as per DWP notification date to start date of entitlement. In exceptional circumstances, the Council would consider revising the claim for more than a month e.g. bereavement of close relative.

(5)        To note that the income bands for households was reviewed every year in line with the Consumer Pricing Index (CPI) from September of previous year to be considered for the new financial year.

(6)        To note that a review and update of section 13A policy for hardship fund for Council tax, including an additional £1.5m fund to support residents, would be considered at the March 2025 Cabinet meeting.