Agenda item

Council Tax Reduction Scheme

To consider the above report

Minutes:

Members considered consultation feedback on a proposal to change council tax reduction levels to bring them into line with other neighbouring authorities and the administration arrangements adopted for Housing Benefit and Universal Credit.

 

The Monitoring Officer explained that following issues being raised over the lawfulness of the proposed decision, she had sought counsel’s advice on the report. Counsel’s advice was that the consultation scheme and the decisions proposed were lawful. On the basis of that advice a number of amendments and one correction were made to the published report to clarify the position for Members in reaching their decision at the meeting.

 

Councillor Baldwin stated that he was very reassured that the intention was to give Members some grounding that what they were being asked to act in a lawful manner. The CTRS Amendment England Regulations 2017 set in law   11 March of the financial year preceding the one in which the proposed revisions would take effect as the deadline for making such a decision.  Notwithstanding the Consent Order, Councillor Baldwin questioned why Members were being asked to make the decision for 2020/21 348 days after the statutory deadline.

 

The Monitoring Officer confirmed that the terms of the Consent Order required the council to remake the decision.

 

Councillor Hilton introduced the report. He explained that following a challenge in the courts the council accepted that the consultation relating to the 2020/21 CTRS did not meet the required standard and was considered by the judge in the Consent Order to be unlawful. The judge required the council to undertake a fresh consultation, draft a fresh Equalities Impact Assessment (EqIA) and remake the decision in relation to the 2020/21 scheme. As directed, councillors had been provided with the outcome of the refreshed consultation and EqIA, so the council had met all of the conditions of the Consent Order. This was detailed in paragraph 1.8 of the updated report.

 

The proposal made last year to change the CTRS to a 20% contribution was proposed to continue in 2021/22. As was shown in the table in paragraph 1.11 this level of payment was aligned with the most generous of the six Berkshire unitary authorities where contributions ranged from 35% to 20%. It was not the percentage discount that was important but the actual sum that claimants would pay. The Royal Borough had the lowest council tax outside of London and by far the lowest in Berkshire and the payments that would be made by claimants were therefore lower than the other Berkshire Authorities. The table in paragraph 1.12 showed the level of council tax levied by the Berkshire authorities at band D in 2020/21 and what a claimant on maximum assistance would pay per year. In the Royal Borough it was £278.52, or £62.15 less than the next lowest, and £161.73 less than the average, and he suspected amongst the lowest in the country.

 

Paragraph 6.2 explained that unlike some, the council retained existing protection for vulnerable customers within the scheme. However, where an affected customer believed they have suffered financial hardship as a result of these changes, the council had existing powers under S13A(1)(c) of the 1992 Act to reduce the amount which a council tax payer was liable to pay, so a safety net was also provided.

 

Councillor Hilton explained that nothing he had said had changed from the 2020/21 budget. What had changed was the new and more extensive consultation which was described in paragraph 8 of the report. Additional activities included: a paper flyer on all current consultations that was delivered to all households; a newspaper advert on all live consultations placed with the local press; emails issued to 303 community groups and an email with a copy of the leaflet was sent to over 10,000 council tax payers being the number of email addresses held. The consultation ran for a full 12 weeks. It had solicited 191 responses, 50 more than the previous year. Not surprisingly most of the respondents (58%) did not agreed with the reduced discount. In making the decision Members must conscientiously take into account the feedback from the consultation process.

 

Councillor Hilton commented that the other ways in which people had proposed to save the money included cutting councillor allowances (13), cutting staff and salaries of senior management (7), and 35 had suggested a council tax increase. The last suggestion was not possible because it would take the council tax above the cap.

 

Councillor Price stated that she was against the increase as it was unfair that the most vulnerable residents were having to generate £300,000 a year to shore up the books. She was going to look back over the last year as to what had happened and what in her opinion should have happened. Over a year ago in January 2020 the proposal to significantly increase the council tax paid by the poorest residents was considered at the Overview & Scrutiny Panel but as the consultation had not yet been completed the debate, and hence scrutiny, was severely limited.  The paper was considered last February at Council and she had spoken then, warning that she feared the consultation was unlawful.  Her concerns were dismissed. She had been informed by the Leader that “the consultation had been thorough and robust”.

 

Council had approved the increases with the poorest residents facing on average a doubling of their council tax.  Then COVID hit.   Central government had issued a hardship fund “to reduce the…council tax bills of … people receiving Local Council Tax Support.”    She doubted that central government even contemplated that after the application of this fund some poor residents would still be facing an increase, which was what happened in the Royal Borough. The EQIA claimed this was used as mitigation but she questioned what would be used as mitigation when the fund was withdrawn by central government in future years. She also questioned whether it was right for local government to use central funds to mitigate discrimination.

 

The council decision was challenged in the High Court and a Consent Order was made in July 2020 where the Royal Borough accepted it had failed to carry out a lawful consultation. The Members should had been informed that they had made a decision based on an unlawful consultation.  They were not, and were also not informed that this had cost £40,000 in legal costs.   If Members had been informed the consultation was unlawful, she suggested they would have examined why to ensure the same mistakes were not repeated and agreed the relevant Scrutiny Panel should look at it in detail. Members were told that the consultation was to be rerun and it would be taken to the Scrutiny Panel, but it was not.  She questioned who decided it would not be scrutinised and why.

 

Members had learned that evening that CTRS recipients were not posted individual letters informing them of the consultation despite the Consent Order stating the Borough “will undertake a fresh consultation in which it consults those persons likely to have an interest in the CTRS”. She felt that meant, without fail, the council should make every effort to consult with each CTRS recipient, but it had not. The council had found the money to post information on the budget consultation (a non-statutory optional consultation) to 10,000 households, but not for 2,600 of the poorest residents, when this was a mandatory statutory consultation.

 

Only 27 out of the 2,600 CTRS recipients had responded, which represented 1% (compared to just under 1% the previous year). Councillor Price felt that something must have gone wrong with the consultation to elicit such a low response. A higher response rate than 1% should be expected on something that was going to have such a negative financial impact. Only a total of 191 responses were received, which was incredibly low. According to her calculation, 79% of respondents said no to the increase, a higher proportion than a year ago.

 

The Consent Order stated that the council would “remake the decision … in light of the fresh consultation and the fresh EIA”.  It had been claimed in the last few weeks that the administration listened and that consultations were held to hear the views of residents, which were valued.  Councillor Price commented that their views had been ignored a year ago and if the proposal was approved that evening, residents would be ignored again. Respondents gave their reasons for disagreeing and suggestions for saving money.  In both cases she suggested they should these be analysed into key themes. She questioned whether residents’ ideas had been taken on board in the budgeting process

 

In conclusion, Councillor Price commented that she feared the council had got it wrong again.  If the proposal was approved she feared it would be inevitable that the council would be challenged again. The claim from the administration that this was a budget protecting the vulnerable was pure spin.  It was not right to place the burden on the poorest residents, and she feared once again for the reputational harm to the Royal Borough.  Given the fact that only 1% of CTRS recipients responded she asked the Monitoring Officer to advise gain why the report has not been withdrawn.

 

Councillor Brar commented that the first consultation had been flawed and the decision challenged in the High Court. The council had accepted it was not lawful. As a councillor she had not been informed of this or how much the legal proceedings had cost. The second consultation had run from 14 October 2020 – 8 January 2021. The total response rate had been 191 versus 141 the previous year. Whether 59% or 79%, the majority were against the proposal.

 

Councillor Davey referred to the previous comments that the borough had the lowest council tax, particularly in comparison to its neighbours. He had calculated that it was between 22%-42% lower but he questioned whether those councils were better equipped to look after the most needy in the community.

 

Councillor Hill recalled the brief time he was the lead member for the relevant portfolio. He had deliberately set the amount those with the least ability to pay at 10% as he had felt this was only fair. He questioned why the council had continued to ask them to pay during and post-COVID.

 

Councillor Johnson stated that it was clear from the report and Councillor Hilton’s comments that it had been recognised that the consultation had not been right the first time. However this had been rectified and Counsel’s opinion was that the reconsultation was legally robust. Overall he believed the proposal was the right thing to do. The council’s positive legacy of a low council tax meant those who had to pay a proportion had to pay less than in other Berkshire authority and most other local authorities across England. A 20% figure still put the borough in the lowest quartile in Berkshire. Councillor Johnson questioned the suggestion that the council would inevitably be challenged again given the QC opinion. However, if a challenge came it would be dealt with appropriately.

 

Councillor Hilton concluded the debate. He explained that there was an error in the original report in relation to the percentage of people who did not agree. The correct figure was 59% rather than 79%, with 42% supporting. The margin between the two views was therefore narrower. At the same time as the consultation, 1800 responses were received on libraries which set in perspective the number of people who saw it as an important issue. In the current year, the government had provided £564,000 of funding to support a council tax hardship fund. This was a prescribed scheme of £150 additional reduction in council tax. In the coming year the council would receive £599,000 for a scheme that the council could devise itself. The council planned to replicate the same scheme but it would need to take into consideration the number of people who may be affected. If all else failed, the council had existing powers to reduce the amount a council tax payerwais liable to pay and that safety net remained. This should give all Members reassurance if there was a significant requirement it would be supported.

 

It was proposed by Councillor Hilton, seconded by Councillor Johnson, and:

 

RESOLVED: That Council notes the report and in particular notes the feedback from the consultation and:

 

i)          Approves the existing 20% contribution level for the 2020/21 Council Tax Reduction scheme with effect from 1 April 2020.

 

ii)        Approves the continuation of the 20% contribution level for the 2021/22 Council Tax Reduction scheme with effect from 1 April 2021.

 

iii)          Re-approves the associated changes to the Council Tax Reduction scheme to align them to rules governing Housing Benefit and Universal Credit.

 

Supporting documents: