Agenda item

(Cabinet Member with Special Responsibility Councillor Hamilton-Cox)

Report of Assistant Director (Head of Revenues and Benefits)  (report published on 29/11/23)

(Cabinet Member with Special Responsibility Councillor Hamilton-Cox)

Cabinet received a report from the Assistant Director (Head of Revenues and Benefits) to enable Cabinet to consider the existing Localised Council Tax Support (“LCTS”) Scheme and the options available, ahead of formal consideration and approval by Council for application in 2024/25.

The options, options analysis, including risk assessment and officer preferred option, were set out in the report as follows:

The challenge for the Council is to adopt a scheme that fits with its ambitions and priorities and is considered fair, deliverable and affordable, given statutory obligations and competing pressures for resources. Council is presented with two basic options:

Option 1:

Retain the existing Localised Council Tax Support (LCTS) scheme, subject to minor consequential amendments to match changes in Housing Benefit rules.

- The existing scheme is considered soundly structured and works well, and offers maximum support for low-income families, who may otherwise find themselves in mounting debt.

- current forecast assumes the continuation of the existing LCTS system and as such, maintaining current levels of support would normally have no impact on the Council’s financial forecast. However, costs have increased in recent years with increased take-up due to Covid-19, although 2023/24 has seen a slow decline in the number of residents receiving LCTS, which would reduce costs if the trend continues in the longer term. However, the cost-of-living crisis may result in an increased number of claims.

- Retaining existing policy principles of keeping various positive entitlement provisions for LCTS in line with other key welfare benefits promotes equality.

Option 2: Make changes to the existing Localised Council Tax Support (LCTS) Scheme to reduce benefit entitlement for working age claimants.

- Currently 9,574 residents claim LCTS in the Lancaster district. As pensioners make up 38% (3,625) of claimants, it means any cut in the level of support provided falls on the remaining 62% (5,949) of working age people on low incomes.

- A reduction in the levels of support provided could arguably provide claimants with further incentives to work, reducing their reliance on benefits, although the jobs market is particularly uncertain at this difficult time.

- This option will have greater adverse financial impact on working age households but would help protect other Council services by requiring less savings to be made by them.

- If levels of support are reduced, the Council would be tasked with the difficulty of collecting this debt from the more vulnerable members of our society, increasing workloads and costs associated with council tax recovery.

 - Additional costs associated with developing new scheme options, consultation exercise, legal changes to scheme etc.

The officer preferred option is to retain the existing Localised Council Tax Support Scheme for 2024/25 (Option 1). This will assist financially vulnerable Council Tax customers in the Lancaster City Council District.

The Council’s existing LCTS scheme works well in terms of providing support, but at a cost, particularly for the County Council. To date the Council has attached a high priority to maintaining council tax support levels available to working age claimants (pensioners being unaffected by Council’s decision).

Adoption of a particular option should be informed by Council’s views regarding the relative priority of LCTS, compared with other services and activities in support of future corporate priorities.

Councillor Hamilton-Cox proposed, seconded by Councillor Wood:-

“That the recommendation, as set out in the report, be approved.”

Councillors then voted:-

Resolved unanimously:

(1)        That the existing Localised Council Tax Support Scheme for 2024/25 (Option 1) be retained.

Officers responsible for effecting the decision:

Assistant Director (Head of Revenues and Benefits)

Chief Officer Resources

Reasons for making the decision:

The LCTS scheme is developed in support of ambitions withing the Council Plan regarding “Healthy and Happy Communities” to optimise access for those that need it most, together with welfare benefits and related support.  The ambition is to continue with a LCTS scheme for the Council, which supports the objective of simplicity, but protects the most vulnerable residents in the district. The Council must continue to ensure that it has due regard to equality in making its local scheme, including how it will minimise disadvantage.