Protecting the vulnerable – how to keep 100% Council Tax Reduction in your area! | CPAG

Protecting the vulnerable – how to keep 100% Council Tax Reduction in your area!

Published on: 
25 October 2017
Written by: 

Dave Hodgson
Mayor of Bedford Borough

As the elected Mayor of Bedford Borough, in 2013 I faced 40 per cent cuts in local government financing, a new localism agenda and welfare reform. As part of welfare reform, local councils had to devise their own Council Tax Reduction Scheme to replace the Council Tax Benefit System, taking on this responsibility from central government.

The government did not make things easy!

A 25 per cent cut in government grant funding in 2014 was one obstacle we had to overcome when looking at our new reduction scheme. We had to protect the elderly as they were exempt from any scheme we introduced. And we couldn’t increase council tax for those able to pay because of a government freeze.

Many areas were introducing a minimum payment of 25 per cent. How could it be fair to look at increasing council tax for those who did not have the means to pay by £393 per year (band D)?

It was clear that these residents would have decreasing incomes over the following years. Working-age residents saw their benefits subject first to a 1 per cent uprating cap and then to a four-year freeze. People with disabilities were on the brink of being re-assessed and moved to the new benefit, Personal Independence Payments. Housing Benefit was being reduced for residents with the introduction of the benefit cap and removal of the spare room subsidy.

Both local government and residents on low incomes were under pressure!

When I entered politics it was to help others and change things for the better. Politics is about choices. Protecting the vulnerable was our priority!

My cabinet was a coalition of Lib Dem, Labour and Independent councillors. We strongly felt as one united group that it would be totally unfair to increase council tax for those families and individuals who had previously been assessed as unable to pay. Doing so would also increase the council’s administration costs: collections, letters, applications to court. And cause stress for all involved.

People looking for work, who are ill or have a disability, need support at a time of crisis in their lives, not stress. It is known that debt can increase the likelihood of them needing NHS mental health support, putting further strain on public services.

We wanted to lessen the risk of financial uncertainty around council tax collection by keeping the new Council Tax Reduction Scheme the same as its predecessor with similar administration costs. It just did not make sense to start charging residents on very low incomes council tax!

So where could we find the savings to do this?

Housing was an important issue in 2013 as it is, increasingly, today. We therefore took a pro-active approach with the discretionary powers given to local authorities to maximise the number of properties in our area occupied and in use.

We introduced 100 per cent council tax charging for vacant properties for the first six months and, if any ongoing works were required to repair a property, up to the 12 month limit. These properties had been exempted from council tax. We abolished this exemption in order to collect revenue from homes to incentivise landlords to get their property back into occupancy as quickly as possible.

We collected 100 per cent council tax on second homes and started to charge an additional 50 per cent council tax on properties which had been empty for over two years.

We introduced a fair system where everyone in the household was responsible for contributing towards the council - so the amounts for non-dependant deductions were increased for households with individuals who were working and could afford to contribute towards the council tax bill.

Families on low incomes who live in larger and more valuable properties were expected to pay a contribution towards their council tax, still receiving a discount but not the 100 per cent they had previously received. This affected households under the council tax bandings of F, G and H, requiring asset-rich families to make a contribution compared to those who were asset poor.

We also reduced the capital allowances from £16,000 to £8,000 for eligibility to our scheme.

We wanted to make it as easy as possible for residents returning to work so we kept the extended payments policy which gives the newly employed four weeks to adapt and adjust to their new working life.

In light of ongoing reductions in grants, especially our revenue support grant from government, we have had to review our scheme annually.

To date, we maintain 100 per cent reduction for the most vulnerable, for those on means-tested standard allowance benefits, without the means to pay. And we keep assessing ways to adapt our scheme so that it remains fair and takes a pro-active approach for all residents who have the means to pay, and for property owners to make sure that buy-to-let properties or second homes are being used to maximum effect.

Our council tax collection rates increased in 2016/17 to 97.6 per cent. That shows our decision not to add to the burden of council tax collection has seen benefits for the council and local residents in the money saved on administration.

We are proud of our scheme in Bedford Borough and will aim to protect it for as long as we can.