The Assembly received a report supported by a presentation from the Divisional Director of Finance setting out proposals to establish a local Council Tax support scheme from April 2013, a requirement of the Local Government Finance Act 2012, brought about as a consequence of the abolition of Council tax benefit. In future Council Tax support will be centrally funded by a fixed grant based on prevailing expenditure levels, but reduced by 10% nationally, which for 2013/14 represents a shortfall to the Council of £2.3m. The Act also makes provision for local authorities to reform Council Tax on empty homes premiums allowing greater flexibility on the level of discounts and exemptions that can be applied, and in so doing allowing additional income to be raised to offset the 10% cut in funding.
The presentation outlined the range of options available to the Council to establish a scheme to fund the shortfall, taking into account the government stipulation that any scheme must fully protect pensioners in terms that their Council Tax Support should not be reduced. This principle did not apply to working age Council Tax Support recipients and a contribution could be sought from them towards their Council Tax liability.
In debate Members raised concerns that many residents were already struggling financially and that the Council Tax Support change was not a policy this Labour Council would have chosen to implement but one which is unavoidable, brought about by the Coalition Government. In concurring with Members’ concerns, Councillor Smith, Leader of the Council referred to the fuel buyout scheme the Council is promoting to assist residents with their fuel bills, which demonstrates the positive ways in which the Council is helping its residents in these tough economic times.
Members debated using the government's additional grant funding for year one to set the percentage contribution from working age Council Tax Support recipients at 8.5% but concluded that this option was not viable as the grant was insufficient to establish an 8.5% contribution and would create a funding shortfall that would have to be met by making cuts elsewhere in the budget.
Having considered the options available as set out in the report, and taking into account that the Council has already carried out an extensive consultation with affected residents:
The Assembly resolved to:
(i) implement option 2 as set out in the report, whereby a 15% contribution would be required from working age Council Tax Support claimants and that this should form the basis of the London Borough of Barking and Dagenham Council Tax Support Scheme from 1 April 2013, and
(ii) agree the changes to empty property exemptions as set out in the report, similarly to take effect from 1 April 2013.