CALL FOR CLARITY ON COUNCIL TAX 'CONFUSION'

First published by: Local Government Chronicles

Official guidance on Council Tax referendum

Calculations have been described as “confusing” and ministers have been asked to issue a clarification. Some finance directors have warned the new rules on Council Tax could see authorities trigger a referendum even if they put up Council Tax by less than 3.5%.

The issue centres on the government’s decision to calculate increases based on the “relevant basic amount of Council Tax”, which excludes from the Council Tax requirement the ‘levies’ councils pay to outside bodies such as the Environment Agency or the London Pension Fund Authority, rather than “basic amount of Council Tax”, which is the amount charged to residents of the borough.

The LGA’s Special Interest Group of Metropolitan Authorities has suggested that the approach which is a complete change on previous the previous method of calculating tax rises – could hit councils with larger levy payments than others, such as those who have set up joint delivery bodies with neighbours for services such as transport and waste.

Sefton and St Helens MBCs, which both pay a levy to the Merseyside Waste Disposal Authority, have calculated they would trigger a referendum with increases of around 2% while Tonbridge & Malling BC have calculated their trigger point would be “a fraction over 2.9%” because of drainage board levies. “We have been to DCLG about it and we got what I see as a rather confusing answer from them,” Stephen Jones, the LGA’s head of finance, said.

Former local government minister John Healey has called on Mr Pickles to clarify how the referendum system is to work. “The new system is beset by confusion and uncertainty. A clear public statement of the way the system works is essential and urgent,” he said. “In practice the trigger point for a referendum will not be 3.5%, it is likely to be lower and to be different in every local authority,” he said.

At a conference last month, Steve Freer, chief executive of the Chartered Institute of Public Finance and Accountancy, said the levies problem “just demonstrates how complicated and complex” the situation is. However, the body believes the exclusion of levies is the right approach in order to avoid councils triggering a referendum simply because a levying body increased its charge.

DCLG argues the removal of levies from the calculation is justified because a reduction in any levy on a council should be passed on to Council Tax payers. In effect, this means that councils which experience a reduction in levy payments cannot chose to reinvest that saving in services without it lowering the amount by which it can raise its Council Tax.

In a letter to Mr Healey, housing minister Grant Shapps wrote: “If, instead of taking the burden of a levy off taxpayers when that levy is reduced, an authority chooses to increase its own expenditure to “soak up the slack”….a referendum would then be required, and I am entirely happy that this outcome is justified.”

DCLG has also sent councils a note warning them to check their calculations carefully: “Authorities which are planning a Council Tax increase just below the [threshold] should take care to ensure that they do not inadvertently increase their relevant basic amount of CouncilTax by marginally more this level.”

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX.

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YVONNE FOVARGUE MP

FIRST PUBLISHED BY:  PARLIAMENTARYCOMMUNICATIONS LTD

COUNCIL TAX CHANGES WILL HIT THE WORKING POOR

The government's proposal to localise Council Tax benefit (CTB) while cutting funding by 10 per cent will hit hardest the working poor, writes Yvonne Fovargue MP.  This reform is part of the decentralisation agenda and its aim is to create stronger incentives for councils to get people back into work and so support the work incentives that will be introduced through the government's plans on universal credit. 

The communities and local government select committee expressed scepticism over the level of local control that councils will actually have saying, 'the proposals for the localisation of Council Tax support seem to us to provide an illusion of delegation with a minimum of real discretion, virtually guaranteeing that the funds available to support working-age unemployed people will be squeezed'. However, the decision to abolish the national CTB from 2013-2014 and instead provide local councils grants to create their own systems will leave them struggling to design replacement schemes. Government has proscribed that existing and future pensioners are protected at current levels leaving no discretion in this area and in determining a scheme councils must also leave untouched the single persons discount. 

Therefore the cash funding cut, which equates to £2.6million for my local authority, Wigan in Greater Manchester will fall onto 18,000 local working-age households, already struggling against a backdrop of the current difficult economic conditions. The 10 per cent cut in the £5bn spent on CTB means that local authorities need flexibility to target support to the poorest and most deserving in society. Government inflexibility poses the danger that those on higher incomes will receive discounts at the expense of the needy. 

The timescale to completely redesign the existing scheme, consult, agree, put in place the administrative process and ensure that IT can deliver the scheme is very tight. Existing working age customers receiving CTB will see a reduction in amounts awarded – before any protection is applied for locally defined vulnerable groups. There is a potential for reductions in collection rates for Council Tax – Council Tax will need to be collected from customers who are receiving a decrease in their existing Council Tax benefit – this could be the first time that some people have had any liability to pay. Collection could be difficult and involve high levels of direct contact to recover the debt. 

This change compounds the effect of other welfare reforms. Households renting in the private sector will have seen a reduction in their housing benefit by December 2012. There are further reforms to housing benefit due in the social sector in April 2013. Local authorities will have to design schemes where very difficult decisions will have to be taken about caps on entitlement, minimum awards, amended capital limits and income tapers and even changes to disregarded income (child benefit, war pensions), or find money from within existing resources to plug the shortfall – politically difficult and at odds with child poverty strategies. 

Hard working families are already squeezed, councils are squeezed and it is inevitable that, yet again, the poor and vulnerable will suffer at the hands of this government.

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX.

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LAMBETH COUNCIL MAKES OPEN DATA PLEDGE

First published by: The Guardian

London authority to make all information it holds available where legally possible

Lambeth council has announced plans to publish all the information it holds online for residents to use. The local authority said it intends to go one step further than simply publishing spending above £500, as all councils in England and Wales have been asked to do by central government, and will release information such as all spending and performance data, unit costs within council services and location information.

Steve Reed, leader of Lambeth council, told Government Computing that the move was part of the local authority's co-operative council plans, which aim to "equalise" the relationship between a local authority and its residents. "What we're trying to do is make services more directly accountable to residents, so they can influence and scrutinise them and propose changes on how they're run so that we can improve and serve residents' needs better," he said.

"To do all of that, and to create a closer relationship between users and providers of services, they need access to the data that we've got, so the idea is that we're going to make everything available." 

Reed explained that this excludes any confidential information. "It covers anything that we're legally able to release. So that excludes private information about people's Council Tax records or payments or whatever, but anything legal and we'll publish the whole lot, which is beyond what any other council has done so far," he said. The council leader acknowledged that the initiative will not happen overnight, and said he expects there to be challenges due to the large volume of data it holds. To help with this issue the authority has been asking its residents what information they want and what format the information should be published in.

Reed said: "So it's not just a matter of getting it out, it's about getting it out in a way that people can use it. We'll somewhat react to demand on this. We want people to tell us what they need first as a priority and what they want to use it for, so that we can respond to that. Other than that, it's going to be a case of churning our way through the council [data]." The move by Lambeth is in contrast to Nottingham council, which has been flagged up by the Department for Communities and Local Government for not publishing expenditure over £500. 

Nottingham has said that it believes doing so would be confusing and unhelpful for citizens. Reed believes that it should be up to individual councils to be accountable to their local electorate, but added: "The more that councils innovate, the more demand there will be from residents in other areas for their councils to do the same. I think if there's pressure from that direction, that's good."

Lambeth anticipates that the benefits of publishing all its information will include a reduction in the amount of time spent on responding to freedom of information requests, and residents coming up with more efficient ways of providing council services. "If they're looking at the unit costs for a particular service and they think, 'Well that looks very high,' and they know of another organisation which could provide a service at a lower cost, then they can come back to the council and say, 'Look, why aren't you doing it that way?' We can make savings like that," said Reed.

He believes that the release of information will lead to the creation of online apps, or interactive features – something which happened at the council's recent 'Made in Lambeth' event. The event gave local residents and developers a chance to use data held on the council's site to create applications. This included the creation of an interactive map of council services and places of interest. "All of that was done for us by residents just accessing the data that we made available. It cost nothing, but it's of real benefit to residents," said Reed.

He said he can't predict exactly where the initiative will take the council, but he is confident it will lead to great things. "Where it will go, I don't know and that's the great thing. That's the point, it's impossible to predict. But I would expect to see some significant changes led by residents as a result of this," added Reed.

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WIRRAL COUNCIL TAX ‘REBEL’ ROGER HAYES SENT TO PRISON

FIRST PUBLISHED BY: WIRRAL NEWS

A SELF-PROCLAIMED COUNCIL TAX REBEL WAS JAILED FOR NON-PAYMENT OF HIS BILL AFTER BEING ARRESTED BY POLICE.

Roger Hayes was last year at the centre of a near-riot at Birkenhead County Courts after appearing facing demands for Council Tax. The case was later moved to Liverpool Crown Court where Hayes, who is the chairman of the anti-establishment British Constitution Group, was subsequently declared bankrupt. However Wirral Council claimed it was stillunable to recover the taxes it said it was owed.

Hayes was due to appear at Wirral Magistrates Court last week, but failed to attend. A warrant was then issued for his arrest and police arrived at his home in Holland Road, Wallasey, on Saturday morning and took him to the court. A spokesman for Merseyside Police confirmed their officers arrested businessman Hayes and transported him to Wirral Magistrates Court.

At the same court on Monday July 2 he was committed to prison for 21 days for arrears and costs of £1,477.14 and “wilful refusal” to pay. The hearing in March last year had ended in chaotic scenes with dozens of people storming the Birkenhead courtroom. Hayes had demanded District Judge Michael Peake take an “oath of office” before urging his supports to make a citizen’s arrest “under the Magna Carta”.

Footage captured by Hayes’ supporters showed how several people then burst forward towards the bench, forcing District Judge Peake to be removed for his own safety. The court building was also closed while hundreds of people gathered on the streets outside. Six people were arrested. Hayes, of New Brighton, had refused to pay the debt because he claims the way the Council Tax is being applied is unlawful.

The 61-year-old had set up his group three years ago to challenge governing bodies.

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX.

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CLAIM YOUR COUNCIL TAX REBATE

FIRST PUBLISHED BY: THIS IS MONEY

PEOPLE ALL OVER BRITAIN ARE MISSING OUT ON HUNDREDS OF POUNDS A YEAR BY FAILING TO CLAIM COUNCIL TAX BENEFIT.

With the average unclaimed rebate running at around £430 a year, four out of every ten pensioners are paying much more Council Tax than necessary, says the Department for Work and Pensions. In some cases, people could reclaim 100 per cent of the their Council Tax. To encourage more people to claim, especially pensioners, the DWP has launched a widespread advertising campaign, which includes sending posters and leaflets to 20,000 organisations. 

The leaflets, entitled Cut your Council Tax – Find Out If You Should Be Paying Less, explain what the benefit is and how to claim it. Council Tax benefit is paid as a rebate on your Council Tax bill whether you rent or own your home, or live rent-free. It does not matter if you already get a discount on your Council Tax, for example if you live alone. You do not have to be a pensioner to be eligible.

The benefit is administered by local authorities on behalf of the Department for Work and Pensions, and claim forms are available from local councils. If you claim pension credit, income support or jobseeker's allowance you will also receive a form to claim Council Tax benefit.  This should be returned to your local council. Alternatively, pensioners who wish to apply are asked to call the pension credit application line on 0800 99 1234

      .

Unless you are aged 60 or over and receive the guarantee credit of Pension Credit, savings of more than £16,000 usually mean you cannot get Council Tax benefit. Savings over £3,000 or £6,000 if you or your partner are aged 60 or over will affect how much benefit you will receive. Council Tax benefit minister Chris Pond says: 'Some pensioners may wrongly believe that they might not qualify for a Council Tax rebate, for example, because they live in a big house or own their home. If in doubt, there's no harm in checking.'

More information is available by logging on to www.dwp.gov.uk from where you can print out a form you can fill in with a pen.

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HOPES OF COUNCIL TAX DISCOUNT FLEXIBILITY ENDED

FIRST PUBLISHED BY: LOCAL GOVERNMENT CHRONICLES

MINISTERS HAVE SLAMMED THE DOOR ON HOPES OF GREATER LOCAL DISCRETION OVER COUNCIL TAX BENEFIT DISCOUNTS AS THE LOBBYING OVER THE REFORMS STEPS UP A NOTCH.

Hopes had been growing that councils could be allowed to reduce the single person’s discount after Baroness Hanham, left, invited the LGA to outline its concerns on welfare reforms in the Local Government Finance Bill.

However, a spokesman for the Department for Communities & Local Government dismissed claims the 25% single person’s discount could be scrapped. “The government has looked at the case for ending the single person discount, and we have rejected it. It has no intention of imposing a new stealth tax on eight million single people.”  

LGA political leaders will meet local government minister Baroness Hanham this week as the bill enters the House of Lords and at a time when Conservative peers are hoping to secure “significant changes” to the legislation. Baroness Hanham, who will oversee the finance bill as it passes through the Lords, has already asked the LGA to formally set out its concerns and, although it refused to release the letter ahead of the meeting, LGC understands the objections raised were the same as at a recent meeting with peers.

They include frustration at Council Tax ‘localisation’, under which councils will be unable to amend existing discounts of pensioners and single people, concern about the short timetable and government assumptions that demand for Council Tax benefit will fall in future years.

LGA chair Sir Merrick Cockell (Con) told executive members: “Baroness Hanham requested a clear letter from us and she has had that and it is being carefully considered.” Sir Merrick said the LGA “agreed with the principles of localisation - what we disagree with is that we are hamstrung”. Gary Porter, leader of the LGA’s Conservative group, left, said nothing was assured, but said ministers “are receptive to the message”.

The LGA and individual councils have calculated that even partial flexibility over the 25% single person discount could help councils tackle next year’s 10% Council Tax benefit funding cut without reducing discounts for those on low incomes or cutting spending elsewhere. LGC understands senior finance officers intend to press the case with officials at DCLG in the coming weeks. Barnsley MBC leader Steve Houghton (Lab), whose authority would only need to reduce the discount from 25% to 20% to meet a £2.2m funding cut, said the discount “does not make any sense”.

Essex CC have similarly calculated single persons discount will cost around £50m a year, well above the £10m cut in funding which the county faces. A spokesman for Essex said: “Allowing more flexibility around single persons discount could offset some or all of the pressure being placed on the new Council Tax support scheme and its beneficiaries.”

During an initial debate in the Lords last week, Baroness Eaton (Con) called for councils to be given “as much flexibility as possible to reform Council Tax discounts so that they can manage the financial risk” while Lord Jenkin of Roding (Con) likened the bill’s centralising tendencies to the Localism Bill. “Happily on that occasion we did secure some significant changes. I hope that we may be able to do so here,” he said.

The changes to Council Tax benefit are happening alongside wider welfare reforms, including the introduction of universal credit which will cap benefits received by families. The LGA has appealed for individual authorities to share any information they have on the impact of the changes on residents and councils. Analysis by Sandwell MBC suggests one unintended consequence could be benefit cuts for families enrolled on the DCLG’s £448m troubled families programme.

Chief executive Jan Britton said there was a risk to the government’s wider strategy. “On the one hand, it’s just announced extra cash for councils to tackle the ‘problem families’ costing the public purse the most - but, on the other, these may well be hardest hit by welfare changes.”

The first in-depth academic study of the effect of capping the local housing allowances on the private rented sector, published by the Department for Work & Pensions last week, has shown that two-third of large landlords said the cap was causing their tenants to fall into arrears. The study did not, however, find strong evidence of other predicted consequences, such as migrations from high-rent areas such as London to cheaper areas.

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX.


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