Agenda item

To receive a report presenting the outcome of the consultation process undertaken on changes to the Local Council Tax Support (CTS) scheme 2025-26 and seeking approval to the revised scheme.

Members are asked to note that the proposed changes in the report were approved by Cabinet on 10 February 2025 for reference on to Council.

In accordance with the change in the order of business agreed at the start of the meeting, the Mayor then invited Councillor Donnelly-Jackson (as Cabinet Member for Housing & Resident Services) to introduce a report from the Corporate Director of Partnerships, Housing & Resident Services setting out proposals to introduce a revised local Council Tax Support Scheme 2025-26, as recommended to Council by Cabinet on 10 February 2025.

In introducing the report, members were advised that the significant nature of the changes to the scheme being proposed had been recognised, with the approach taken in developing the revised scheme having sought to balance the competing need for fairness and transparency against the Council’s overall financial sustainability given the challenging financial context within which the Council was having to operate.  Unlike many other universal benefits, members were reminded that Council Tax Support schemes were determined at a local level meaning the levels of support available would vary from area to area.  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.  Whilst supporting nearly 17,000 working age individuals and just over 8,000 pensioners this had involved costs of approx. £33m during the previous year, with nearly 20p from every £1 collected in Council Tax t being provided in the form of Council Tax Support.

In highlighting the financial challenges faced not only within Brent but across many other local authorities (resulting  in many having to seek additional financial support) members were advised that the cost associated with provision of local Council Tax Support Schemes was an issue being revisited by many other local authorities across London.  In view of the budget gap currently faced by the Council, the need had been identified 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.  In reviewing current operation of the scheme, confirmation was provided that the statutory pensioner element of the scheme would remain protected with the proposed changes therefore focussed on the working-age element and including a standard 35% minimum contribution and simplified non-dependant deductions designed to make the system clearer, and easier to navigate whilst also reducing the administrative burden and ensuring that all working-age households contributed fairly towards local services, whilst also continuing to protect the most vulnerable and with a built in annual review of income bands to ensure they continue to reflect economic realities.

Having outlined the proposals for which approval was being sought, Council was reminded these were not being put forward as a matter of choice but out of necessity and in recognising the impact which the proposed changes were likely to have on affected households, the opportunity was also taken also to highlight the measures which had been developed to provide targeted support for those most in need. These included the reinvestment (from the savings identified) of £1.5m into a hardship fund alongside a programme of proactive outreach and support through the Welfare Advise Service (working through Brent Hubs alongside partners such as Citizens Advice Brent) designed to provide financial guidance and debt management support. In addition, work would continue with voluntary organisations, community groups and other local service providers to ensure those affected were aware of their entitlements and were able to access the support needed.

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 with all those involved in helping to shape the review and ensure the scheme remained as fair and functional as possible thanked for their support and efforts.

Having thanked Councillor Donnelly-Jackson for moving the report the Mayor then invited contributions from other members, with the following comments received.

Outlining his concern at the proposed extent of the changes, Councillor Lorber began by highlighting the significant impact he felt they would have on local residents already struggling as a result of the cost-of-living crisis with, what he felt, had been insufficient time to make them aware and allow them to make any necessary adjustments.  Concern was also 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 members when considering the proposals and impact locally to consider, as a minimum and as proposed within the Liberal Democrats alternative budget proposals, increasing the level of the financial hardship Support Fund from £1.5m to £3m.

In recognising the challenging nature of the financial position faced by the Council as context within which the proposals had needed to be developed, Councillor Grahl felt it was important for members when considering the proposals to acknowledge the efforts being made to ensure those households most in need would continue to be supported with all those involved in developing the wide range of support available thanked for their efforts.  The opportunity was also taken to draw attention to the way in which the proposals served to highlight the regressive nature of the current Council Tax regime and need for fundamental reform of the funding system for local government, with the ongoing efforts being made to lobby for the necessary change and longer term funding settlements proposed by the new Government therefore welcomed.

As a final contribution, Councillor Mistry whilst also recognising the challenging nature of the financial position faced by the Council as context within which the proposals had needed to be developed as a result of the Council having to deliver a range of essential demand led services amidst rising costs, advised that the Conservative Group were in support of the proposals having recognised the scheme previously operated by Brent as one of the most generous across London and which was recognised as no longer affordable to deliver.  In support of the review undertaken, the Conservative Group felt there was scope to seek further changes with their alternative budget proposals having recommended raising the 35% Single Persons Discount to 40%, in order to save an additional £1m which could then be used to provide additional support to pensioners who had narrowly missed out through loss of the Winter Fuel Allowance, and more robust enforcement to tackle fraudulent claims.

As no other members indicated they wished to speak and Councillor Donnelly-Jackson advised she did not intend to exercise her right of reply the Mayor then moved on to put the recommendations in the report to the vote and they were declared CARRIED.

Council therefore RESOLVED

(1)        To approve the revised Local Council Tax Support (CTS) Scheme for 2025-26 incorporating the following changes:

(a)        Introduction of a standard 35% minimum payment for working age households and application 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 feed 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.

(b)        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

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

(3)        To approve 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.

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

(5)        To approve that a review and update of section 13A policy for hardship fund for Council tax, including an additional £1.5m fund to support residents, be considered at the 10 March 2025 Cabinet meeting