Content

10.1

The Finance and Performance Policy Committee
received a report of the Director of Finance and Commercial
Services which provided details of the Council’s review of
its Council Tax Reduction Scheme and sought approval that the
scheme for 2025/26 should not be amended, excluding statutory
changes that the Council was required to make. In addition, the
report sought approval to maintain the Council Tax Hardship Scheme
in 2025/26.

 

 

10.2

RESOLVED UNANIMOUSLY: That the
Finance and Performance Policy Committee: -
 
-      
Notes the review of the Council’s Council Tax Reduction
Scheme, detailed in this report
-      
Agrees that, in line with the review, the Council’s Council
Tax Reduction Scheme is not revised, apart from the changes the
Council is required to make by statute
-      
Approves the amendments to the Council’s Council Tax
Reduction Scheme to accommodate the changes the Council is required
to make by statute
-      
Agrees that the Council’s Council Tax Hardship Scheme
continues to operate as detailed in this report

 

 

10.3

Reasons for
Decision

 

 

10.3.1

Legislation requires each Billing Authority to
annually consider whether to revise or replace its Council Tax
Reduction Scheme. For that purpose, we have carried out a review of
the Council’s scheme.

 

 

10.3.2

Following from this review, it is recommended
that the CTRS remains unchanged, as whilst reducing the support
offered through the scheme may help with the Council’s
financial situation, this is countered by the fact that the burden
will fall on vulnerable households who are experiencing financial
hardship as a result of the cost-of-living crisis. It is also
considered that maintaining the scheme in its current form and at
the same level of support provides certainty during what are
uncertain times.

 

 

10.3.3

In reaching this decision, consideration has
been given to both increasing and decreasing the level of support
provided under the CTRS, and to moving away from a scheme based on
the previous CTB scheme. Further detail on these considerations is
provided in the main body of the report.

 

 

10.3.4

Given the current financial position of the
Council, the Council is not able to introduce a more generous
scheme in 2025/26.

 

 

10.3.5

By maintaining the CTHS, the Council will be
able to continue to offer targeted support to those in the most
severe financial need including those who are least able to change
their financial situation.

 

 

10.4

Alternative Options
Considered

 

 

10.4.1

The Pensioner element of CTRS is prescribed by
Government so cannot be changed by the Council. Consequently, the
following options relate to the discretionary element of the scheme
that provides support to Working Age households.

 

 

10.4.2

Changing the Cap on
Liability
 
Sheffield replaced the Council Tax Benefit
scheme in 2013 with a CTRS which was closely aligned in the way
they it calculated entitlement. Most local authorities took the
same approach when CTRS was introduced but some tweaked aspects of
the scheme for their own purposes. For example, some authorities
chose to reduce the capital limit which meant that fewer of their
customers with savings would be eligible to claim CTS. Others, like
Sheffield, chose to limit the amount of CTS that could be awarded
by introducing a cap on a customer’s Council Tax liability.
In Sheffield, support offered to working-age customers is capped at
77% of their net Council Tax liability. However, although a less
generous cap would produce some savings for the Council it is
highly likely that these would be offset by increased arrears,
higher debt recovery administration costs and added pressure on the
CTHS.

 

 

10.4.3

Introduction of a
Banded Scheme
 
Schemes like ours, because they are based on a
sophisticated means testing model, are not easily automated. This
means that, although the customer can complete their claim on-line,
it is not automatically processed and awarded by the IT system.
Instead, an officer takes the information provided on the claim
form and verifies that the details provided are correct or requests
further details if required. When the officer is satisfied that
everything is in order, they input the claim on the processing
system where CTS is assessed and awarded. Although a Banded scheme
can offer the advantages of automation, our current IT system is
not designed to operate in this way, so requires bespoke amendments
and workarounds to do so. Our IT supplier, Capita, is addressing
this issue by developing a dedicated system for this purpose
although it is not expected to be available until 2026.

 

 

10.4.4

Maintaining the
Current Scheme

 

 

 

Maintaining the current scheme in 2025/26
continues to offer the following advantages:

 

 
a)   
Maintaining the current scheme in 2025/26 continues to offer the
following advantages:
b)   
It will continue to spread funding for CTS equitably across all
working[1]age claimants
and, by applying the means test already established by CTB, ensure
that those with greatest need continue to receive the greatest
level of support.
c)   
There will be no requirement to go out to consultation, purchase
new IT systems, undertake training, amend documentation, and
produce publicity material, all of which increase costs and would
be required if the current scheme were to be amended.
d)   
At a time when a cost-of-living crisis is placing an enormous
strain on the finances of households in Sheffield, it maintains
consistency of support to working age CTRS households by not
subjecting them to any changes in support that an amended scheme
may bring and does not add any additional cost should a
transitional protection scheme be offered.
e)   
Since the insourcing of the Revenues and Benefits service in 2020,
the service has not enjoyed any period of stability. Insourcing,
Covid, and a comprehensive restructure in 2023 and its ongoing
recruitment have provided and continue to provide significant
challenges. To be successful and minimise disruption to the service
and its customers the implementation of a new scheme, especially a
Banded scheme, needs to be fully costed, requires careful planning,
a resilient and stable working environment and adequate
resources.
f)     
Finally, due to ongoing uncertainties about the government’s
long[1]term plans for
welfare reform and the timescales for the implementation of
Universal Credit, it may be prudent to wait and see how our
residents will be affected before changing the way in which we
decide is best to support them in paying their council tax.

 

 

10.4.5

Given the above advantages of maintaining the
current scheme into 2025/26 the alternatives have been
disregarded.