Agenda item

The Director for Finance, Risk and Performance submitted a report that updated members on the work undertaken so far in respect of the Council Tax Support Scheme, and in respect of consultation with both the public and the Major Precepting Authorities in respect of proposed changes to the Council’s Council Tax Support Scheme with effect from 1 April 2026.

The Director of Finance, Risk and Performance said that the current scheme commenced in 2013, when it moved from a government scheme to a local scheme. He said that at that time, central government passported 90% of the cost in the form of funding to the council to administer the new council tax support scheme.

Members were reminded that the scheme had to be approved by the Council each year as part of the budget process. The Director of Finance, Risk and Performance said the scheme had not changed much since it was introduced in 2013, and pensioners could get up to 100% support, and working aged people could get up to 91.5% support.

The Director of Finance, Risk and Performance said that new scheme for 2026/27 would involve a move to a banded scheme. He said that the main benefit of the banded scheme for an individual was that their income could fluctuate up and down within the band without a reassessment.

Members were advised that this process would mean that the council would not have to carry out regular reassessment activity and gave assurance to individuals in avoiding weekly or monthly reassessments. The Director of Finance, Risk and Performance said that the scheme that would be brought forward later in the year for approval would aim to be a cost neutral scheme and there would be public consultation later this year once this process was completed.

The Director of Finance, Risk and Performance said that the scheme was still being finalised and might fluctuate slightly, and one of the recommendations that went to Executive on 3 June 2025 had changed to reflect that. Members were advised that the final proposed scheme would be signed off by the Director of Finance, Risk and Performance and the Executive Member for Financial Sustainability for consultation.

The Director of Finance, Risk and Performance said that the matter would come back to Full Council for final approval around November 2025, with a proposal for a new council tax support scheme for 2026/27 following consultation.

Councillor Nicholls said that there was only one option for changing the system and she asked if this was based upon examples from councils that had already adopted a similar scheme and had this been a success and had there been any issues encountered.

The Shared Service Manager (Benefits) said that he had been extensively in contact with the other Hertfordshire Benefits Teams in respect of council tax support and the scheme had been very successful. He said the current scheme needed to be simplified and a lot of the working age recipients of council tax received universal credit and there was a monthly reassessment of their award.

Members were advised that Officers changed their council tax support award, which as well as being a piece of work for benefits staff also required the charge payer to be rebilled and new instalment plans set up.

The Shared Service Manager (Benefits) said that the means tested scheme was incompatible with some of the changes in the general benefits arena. The changes would simplify the scheme and make it fairer and would also cut down on administration and assist with collection rates.

Councillor Marlow asked what kind of savings might be made and where would these savings go, i.e. back to the council or to the government. The Shared Service Manager (Benefits) said that there would not be saving in the context of the scheme itself. He advised that the saving that might be generated was from less resources required within the benefits team to administer the actual reassessment of cases.Members were advised that the saving hopefully would be around improved collection rates for the council.

Councillor Horner welcomed a number of aspects of the proposed changes. He expressed a concern that where there was banding, there would be a regressive tendency on the margins of the council tax bands.

Councillor Horner asked about the amount in the scheme for the housing element of universal credit being disregarded. He urged Officers to specifically consult the agencies who supported residents who were on benefits and asked if there was a calculator for the public to able to compare how the changes would affect particular groups.

The Shared Service Manager (Benefits) said that universal credit housing costs were not taken into account in respect of the assessment of council tax support. He said that there was a mechanism where officers evaluated the award of universal credit, and the same would apply to the banded scheme.

The Shared Service Manger (Systems, Support and Control) added that as modelling was still underway, Officers could add or remove certain disregards if required, and Officers also had some flexibility in respect of extending the council tax bands. She referred to moving the 20% cut off slight to something in the region of 15%. Members were advised that a consultant had been engaged to assist with the consultation, and some of this consultation would be digital.

Councillor Carter said that it made sense to have a simpler system, which would be easier to understand. She expressed a concern about residents who were going to lose their entitlement and asked about transitional protection for those who experience exceptional hardship. She asked if there was a possibility of tapering the transition to avoid a sudden shift in the system for council tax support.

Councillor Holt asked for some clarity in respect of new modelling of different case scenarios if more households qualified that expected. He asked about the exceptional hardship fund, and whether this was the same as the exceptional hardship scheme which was already implemented by the council.

The Director of Finance, Risk and Performance said that the hardship scheme was the same as the exceptional hardship scheme, and he could come back to Members re that funding in due course.

The Shared Service Manger (Systems, Support and Control) said that as regards modelling, there would be a range of modelling starting with the 100% entitlement down to also reducing the liability of that officers used for assessment.

The Director of Finance, Risk and Performance said that he could not comment on whether a transitional protection was possible for those who experience exceptional hardship. He said that Officers had noted that and look to incorporate this consideration into the modelling of scenarios.

Councillor Buckmaster said that scheme should be straightforward so that residents could understand the reasoning for why their benefits had changed. Councillor Jacobs said that the paper should explore some worked examples for when the consultation was due to commence.

Councillor Jacobs referred to the newly agreed protocol and the undertaking that the Executive to come back to Overview and Scrutiny Committee on the points that had been raised.

Councillor Nicholls proposed, and Councillor Swainston seconded, a motion that the Council Tax Support Scheme be considered and Members comments be provided to the Executive Member for Financial Sustainability for his consideration.

After being put to the meeting and a vote taken, the motion was declared CARRIED.

RESOLVED – that (A) the Council Tax Support Scheme be considered; and

(B)   Members provide comments to the Executive Member for Financial Sustainability for his consideration.