URL: https://committeeadmin.lancaster.gov.uk/ieDecisionDetails.aspx?ID=1545

Decision Maker:

Outcome:

Is Key Decision?: No

Is Callable In?: No

Purpose:

Content: (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 2025/26.   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, the cost-of living crisis and annual Council tax increases.  2024/25 has seen a small reduction in residents receiving LCTS from 9,574 in 2023/24 to 9,310 in 2024/25. Should this trend continue, this could reduce costs of the scheme in the long term.   - 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 9,310 residents claim LCTS in the Lancaster district. As pensioners make up 38% (3,565) of claimants, it means any cut in the level of support provided falls on the remaining 62% (5,745) 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.     Option 1: Retain the existing LCTS scheme Option 2: Amend the LCTS scheme to reduce entitlement Advantages The current scheme provides support up to a level of 100% and assists. those on low incomes Financial savings to Lancaster City Council and the other precepting authorities. Disadvantages The Government does not fully fund the cost of a 100% LCTS scheme. The additional cost falls on Lancaster City Council and the other precepting authorities. A reduction in support would result in Council Tax increases for those on low incomes. The Council Tax team would need to recover more money, often from those least able to make payments. Risks The cost of the scheme may increase due to an increase in new claims as the cost-of-living crisis progresses. Reduced collection rates and increased debt. Potential reputational damage.     The officer preferred option is to retain the existing Localised Council Tax Support Scheme for 2025/26 (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 the Council’s decision).   Adoption of a particular option should be informed by the 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 Dowding:-   “That the recommendation, as set out in the report, be approved.”   Councillors then voted:-   Resolved unanimously:   That the existing Localised Council Tax Support Scheme for 2025/26 (Option 1 to the report) be retained.   Officer responsible for effecting the decision:   Chief Officer Resources   Reasons for making the decision:   The decision is consistent with the Council Plan:   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.    

Date of Decision: December 3, 2024