22nd November 2012
22nd November 2012
Bournemouth's Cabinet has recommended not to accept the Government's offer of additional grant funding to support the delivery of the new Local Council Tax Support Scheme because it would create a budget pressure on 2013/14 of over £½ million.
The scheme is being introduced because the government has cut Council Tax benefit funding to local authorities by 10 per cent from 2013/14, and requires councils to deliver a new system of Council Tax benefit applicable locally, for introduction in April 2013. This will mean that many people of working age are likely to receive no more than 80 per cent Council Tax Benefit, whilst ensuring that pensioners and the most vulnerable continue to be exempt from paying any Council Tax.
Despite cutting the amount of money available to local authorities to provide council tax benefit, the Government wants people to receive no less than 91.5 per cent benefit, and has offered a subsidy to councils, for one year only, to encourage that.
Under that arrangement, Bournemouth Council would receive from the Government £384,000 to meet the 91.5 per cent Council Tax Support level. However, to do this would cost £898,000 a funding gap of £514,000 which would have to be funded by the Council.
Therefore, Cabinet has recommended not to accept the one-off subsidy, and instead to continue with the proposed scheme, as put to the public in a recent consultation. Early indications from the public consultation show that residents do not want the cost of the new scheme to be met by cuts to other Council services or increases to Council Tax.
Councillor John Beesley, Leader of Bournemouth Council, said: In implementing the proposed scheme with a maximum benefit of 80 per cent, we are already facing a shortfall of £775,000 from April 2013. If we accept government's offer of additional funding for one year only this would further increase the shortfall, putting the Council's budget under severe pressure now and in the future which is unacceptable.
We know that this imposed change by government will have a significant detrimental benefit on some of our residents. To help mitigate that, consideration is now being given on how the Council might fund and operate a Local Welfare Assistance Fund from April 2013, to best support the most vulnerable in our community as a result of the Welfare Reform changes and the impact they may have on people.
At the same Cabinet meeting Council Tax exemptions and discount were also considered. As part of the government's support of the Localism agenda, local authorities are now able to set Council tax discount and exemptions and Cabinet has recommended a number of proposed changes:
Charge owners of second homes full Council Tax (owners of second homes currently receive a 10 per cent discount on their Council Tax).
Introduce a 50 per cent Council Tax charge for a maximum of 12 months on homes that are empty, unfurnished and under-going major repair work. (currently exempt from paying any Council Tax).
Owners of empty and unfurnished homes will be exempt from Council Tax for a maximum of three months (currently exempt from Council Tax for up to six months).
Charge a 150 per cent Council Tax on properties that are unoccupied and unfurnished for more than two years (currently the charge is full Council Tax).
The aim behind this approach is to act as a disincentive to maintaining empty properties, and instead encourage property owners to bring empty properties back into use as quickly as possible.
Any revenue raised from the discount and exemption changes will be used to offset the delivery of the Council's Local Council Tax Scheme through the proposed Local Welfare Assistance Fund.
Notes: The Department for Work and Pensions currently provides hardship grants and loans. From April 2013 it will be the responsibility of local authorities to provide a Welfare Assistance Fund for residents.