Introduction

Since 1 April 2013, all local authorities have been required to establish their own Council Tax support scheme for residents of working age who are on low incomes. In Bexley, this is called the Council Tax Reduction Scheme (CTRS). National regulations mean that the Council has to protect the Council Tax Reduction levels for those of state retirement age so that they receive no less financial support than they would have under the former Council Tax Benefit rules.

The Council has to set a balanced budget for each financial year, however there are many challenges ahead. The forecasted budget gap is set to reach £39.498m by 2027/28 due to rising costs, pressures and demands on services and ongoing economic uncertainty. There continues to be increasing spending pressures in a number of key services, including both Children and Adult Social Care, Special Education Needs Transport, Emergency Accommodation and other demand led services such as Parking and Waste Services. The uncertainty around the state of the economy over the next few years will also have an impact. The Council will receive information from the Government about local government funding and the level of grants from central government as part of the 2024 Autumn Budget, the 2025 Spending Review, and the local government finance settlement, and until that information is provided there is uncertainty over the resources available to the Council. The impact of energy prices, inflation and interest rates has a direct impact on the Council, the amount we pay for services and the income we are able to collect. Our challenge is to continue to provide good quality and affordable public services, while balancing our income and spending levels in the current challenging circumstances. As such, the Council now needs to consider whether changes need to be made to the working age Council Tax Reduction Scheme in order to provide a scheme which provides a reasonable level of support to residents, whilst taking into account the budgetary position.

In order to help people gain employment/get back into employment, the Department for Work and Pensions provides various types of support via the Jobcentre Plus network. Details of support available can be found on the help with moving from benefits to work page on the Government website.

The Government also expanded support with childcare costs from this year to help parents who are working. Details of the support available and eligibility can be found on the check you're eligible for free childcare if you're working page on the Government website. 

Have your say

The Council is seeking your opinions on potential changes to the current scheme. Bexley is keen to receive views from residents, local voluntary and welfare organisations, landlords, and other interested parties - regardless of whether they currently claim Council Tax Reduction Scheme or not. The information you provide will be treated confidentially and used solely by the Council.

Details of the current scheme can be found on the Bexley website. Please read the council tax support page before answering the questions in our survey.

Please ensure you submit your response by the deadline of 30 October 2024.

The information you provide will be treated confidentially and used solely by the London Borough of Bexley. The final decision on the scheme will be made by the Council no later than 05 March 2025, and details will be made available on the Council’s website.

Who will be affected?

These proposals will affect residents of working age who currently claim help from the Council Tax Reduction Scheme, and also anyone of working age who pays Council Tax now and might be eligible to claim support in the future should their circumstances change. Residents who have reached state retirement age will not be affected by these proposals.

Proposals

Current scheme information

The current scheme applies a percentage award based on the income band that the claimant falls into. When calculating the income band, an Applicable Amount (i.e. the amount of money the government believes a household needs to meet necessary weekly costs) is first applied based on the household circumstances. This gives a basic level of income disregard that increases if the claimant has a partner, children, is disabled etc. The following incomes are deducted from the claimant’s total weekly income before comparing income to their Applicable Amount:

• Disability Living Allowance/Personal Independence Payments
• Child Benefit
• Foster/Guardian/Adoption payments
• Child Maintenance payments
• War Disablement Pension/War Widows/Widowers Pension
• Housing Element and any other disregarded income in a Universal Credit award
• £20.00 of weekly earned income

The remaining weekly income once the Applicable Amount and any disregarded incomes have been deducted is then used to apply the appropriate income band to the claim. Where a person is in receipt of Income Support, income-based Jobseekers Allowance or income-related Employment and Support Allowance, they are automatically put into the highest award band (as their income will be the same as their Applicable Amount). The same applies to someone on Universal Credit due to unemployment, where their only income is Universal Credit.

The current scheme percentage awards and income bands are as follows (the CTRS percentage award is applied to the bill remaining after any other relevant Council Tax discounts such as Single Person Discount, Disabled Band Reduction etc):

Proposed options

• Option 1 - Reduce the percentage of awards available by 15%

The revised awards would be as follows:

• Option 2 - Reduce the percentage of awards available by 10%

The revised awards would be as follows:

• Option 3 - Reduce the percentage of awards available by 5%

The revised awards would be as follows:

• Option 4 - Retain the current award percentage, but reduce the top of each income band by £15

The revised income bands would be as follows:

• Option 5 - Retain the current award percentage, but reduce the top of each income band by £10

The revised income bands would be as follows:

• Option 6 - Retain the current award percentage, but reduce the top of each income band by £5

The revised income bands would be as follows:

• Option 7 - Retain the current award percentage and retain the income bands for the 3 highest levels of award, but reduce the span of the remaining income bands to £25 increments

• Option 8 - Retain the current award percentage and income bands, but restrict the maximum that can be claimed to the Band D Council Tax charge

This option would mean that if a claimant lives in a Band E, F, G or H property, their Council Tax Reduction Scheme award would be calculated based on the lower Band D charge. The current year charges are as follows:

For example, a person currently receiving the maximum 80% award living in a Band E property would receive £2,107.52 in support for the current year. If this change were introduced, their support would change to £1,724.03 for the year i.e. £2,155.04 (which is the Band D charge) x 80%.

• Option 9 - Do not make any of the above amendments