The Scrutiny Committee met to discuss a call-in request regarding a decision on council tax collection subsidies and incentives. Councillor Andy Booth, Chairman of the Scrutiny Committee, was scheduled to introduce the meeting. The committee was also expected to note that Councillor Rich Lehmann had replaced Jenni Hawkins on the committee.

Call-in of Council Tax Decision

The main item for discussion was the call-in of decision 25/00004, which concerned Council Tax Collection Subsidies and Incentives. Councillor Rich Lehmann and Councillor Alister Brady submitted the call-in request. The decision under scrutiny was taken by Peter Oakford, Deputy Leader and Cabinet Member for Finance, Corporate and Traded Services, on 19 March 2025.

The reasons for the call-in, as submitted by Councillor Lehmann and Councillor Brady, stated that:

The decision was not taken in accordance with the principles of decision-making set out in 8.5(d) a presumption in favour of openness.

They argued that during a Policy and Resources Cabinet Committee meeting on 5 March 2025, the Cabinet Member for Finance, Corporate and Traded Services had repeatedly stated that the decision had already been made, giving the impression that the committee's role was merely a formality. They also raised concerns that the committee was not given enough information regarding the potential impact of the decision, specifically the level of risk (£30m) included in budget papers.

The desired outcome of the call-in was for the Scrutiny Committee to recommend that the implementation of the decision be postponed pending review by the full Council.

Background to the Decision

The decision in question involved ceasing the current arrangement with Billing Authorities, ending financial support and incentive payments towards the cost of setting up and administering local Council Tax Reduction Schemes (CTRS) from 1 April 2025. It also involved ceasing incentive payments to support the removal of discretionary empty property discounts and charging empty property premiums, also from 1 April 2025. Authority was to be delegated to the Interim Corporate Director Finance to formally notify the Billing Authorities of these changes.

The rationale behind the decision was the need to find £19.8m savings to replace one-off solutions used to balance the 2024-25 budget, in line with Objective 3 of Securing Kent’s Future. It was argued that removing these subsidies and incentives aligned with the policy consideration to review all (cross) subsidies where there is no statutory requirement to provide support.

Financial Implications

The annual saving from ceasing the subsidy and incentive on local CTRS was estimated to be £1,746,700 based on the 2024-25 approved budget. The annual saving from ceasing the empty property incentive was estimated at £1,450,000, also based on the 2024-25 budget.

However, it was noted that a 1% reduction in collection rates across all 12 Billing Authorities could result in a £9.5m to £9.8m reduction in the Council’s share of council tax. To mitigate fluctuations in collection levels, the Council planned to continue managing these through a smoothing reserve.

Alternatives Considered

Maintaining the current arrangements was deemed unsustainable due to the need for the Council to focus on its statutory responsibilities. A transitional arrangement involving a phased removal of the subsidies/incentives was also considered but rejected, as it would reduce potential savings and run counter to the policy consideration of removing non-statutory cross-subsidies.

Council Tax Reduction Schemes

Until 2013, households on low incomes could claim welfare benefits towards their council tax charge. These arrangements were transferred to local CTRS in April 2013, with funding transferred from the Department for Work and Pensions (DWP). Each Billing Authority is responsible for developing local CTRS to provide low-income households with a discount on council tax charges.

Empty Property Discounts and Premiums

The Local Government Finance Act 2012 introduced additional discretions on council tax, including removing mandatory exemptions for empty properties and introducing discretionary powers to grant discounts or raise premiums on long-term empty properties. The Council has encouraged Billing Authorities to use these powers to reduce empty property discounts and levy premiums on long-term empty properties, consistent with the Council’s “No Use Empty” programme.