Issue - meetings

To consider changes to the Local Council Tax Support scheme for working age households from 2025/26.

Recommended Council to –

note that proposals in this report relate to the Local Council Tax Support (LCTS) scheme for working age claimants and that pensioner households claiming LCTS are unaffected and continue to be able to receive up to 100% support, subject to eligibility

note that in setting the budget for 2024/25, savings amounting to approximately 10% of the councils overall net budget were agreed and that within this sum was £1.1m relating to potential changes to LCTS, subject to consultation and agreement, effective from 2025/26 onwards

note that:

·        the direct cost of support to pensioner and working age households is £26.2m of foregone council tax to the council and GLA, of which £13.3m is working age support attributable to the council

·        LCTS in Greenwich is within the top quarter of ratios between “working age support to council tax income” in London

·        around half of London’s councils have recently consulted on changes to their working age schemes, also to take effect from 2025/26

agree that, following many years of structural under funding and in order for the scheme for working age claimants to remain affordable, the maximum level of support for working age claimants of LCTS changes from 100% to 80%, so that all households make a minimum contribution of 20% towards the total council tax bill (before support)

agree to increase the earnings taper for working age residents from 15% to 25%.

agree to increase the non-dependant deduction charge from £5 to £10 per week

agree to also remove the exemption for non-dependants who are in receipt of passported benefits and / or not in work.

agree to abolish the second adult rebate for working age claimants

agree to allow the use of DWP notifications of a claim for Universal Credit as a claim for Local Council Tax Support.

agree to create a Greenwich Supports Discretionary Council Tax Hardship Fund to assist Council Tax payers whom are experiencing financial hardship caused by the 2025/26 scheme changes, combined with cost-of-living pressures, low-incomes and low financial resilience.

delegate to the Cabinet member for Inclusive Economy, Business, Skills and Greenwich Supports to agree details of the Hardship Fund and its implementation.

The Cabinet Member for Finance, Resources and Social Value introduced the report. The Cabinet Member commented that many other local authorities were seeking a greater than 20% contribution from working age claimants.

In response to questions from Cabinet, the Director of Resources gave examples of London Boroughs which were moving to a greater than 20% contribution and indicated that was the general trend. He added that Greenwich would have in addition a Hardship Fund.  The Director confirmed the savings that would be made. The Director advised that were Option 1 to be pursued and no change made it would lead to a deficit of £2.8 million in the draft budget. To address that the Council would by 11 March 2025 either have to increase Council Tax beyond the 4.99% level, which would require a local referendum and which would, he emphasised, be a substantial cost in itself to the Council, or alternatively savings would have to be made in the provision of other services.

Resolved –

That Council be recommended to –

1.       Note that proposals in the report relate to the Local Council Tax Support (LCTS) scheme for working age claimants and that pensioner households claiming LCTS are unaffected and continue to be able to receive up to 100% support, subject to eligibility

2.       Note that in setting the budget for 2024/25, savings amounting to approximately 10% of the councils overall net budget were agreed and that within this sum was £1.1m relating to potential changes to LCTS, subject to consultation and agreement, effective from 2025/26 onwards

3.       Note that:

·        the direct cost of support to pensioner and working age households is £26.2m of foregone council tax to the council and GLA, of which £13.3m is working age support attributable to the council

·        LCTS in Greenwich is within the top quarter of ratios between “working age support to council tax income” in London

·        around half of London’s councils have recently consulted on changes to their working age schemes, also to take effect from 2025/26

4.       Agree that, following many years of structural under funding and in order for the scheme for working age claimants to remain affordable, the maximum level of support for working age claimants of LCTS changes from 100% to 80%, so that all households make a minimum contribution of 20% towards the total council tax bill (before support)

5.       Agree to increase the earnings taper for working age residents from 15% to 25%.

6.       Agree to increase the non-dependant deduction charge from £5 to £10 per week

7.       Agree to also remove the exemption for non-dependants who are in receipt of passported benefits and / or not in work.

8.       Agree to abolish the second adult rebate for working age claimants

9.       Agree to allow the use of DWP notifications of a claim for Universal Credit as a claim for Local Council Tax Support.

10.     Agree to create a Greenwich Supports Discretionary Council Tax Hardship Fund to assist Council Tax payers whom are experiencing financial hardship  ...  view the full minutes text for item 6