Significant changes to council tax support scheme proposed with some concerns raised

Proposed significant changes to Solihull's council tax support scheme have been welcomed by but concerns have been raised some struggling householders could suffer “additional financial stress”. Council tax reduction is a discount helping people on low incomes pay their annual council tax bill.

From April 1 next year, Solihull Council wants to change from a means-tested scheme to a simplified ‘income banded’ scheme used widely by authorities elsewhere. The authority says the changes will introduce a scheme that is easier to understand and more supportive for people most in need.

Pensioners would not see any change as the scheme to support this group is set out by central government. The cost of the current scheme is 13.13 million and the switch is also forecast to save the council around £420,000.

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At a recent scrutiny meeting Joanne Robinson, the authority’s head of income and awards, said modelling suggested 75 per cent of existing council tax reduction claimants will see either an increase or no change in their entitlement. But with 25 per cent potentially seeing a decrease Councillor Leslie Kaye said there could be an “intangible social cost” due to additional financial stress to households on very low incomes.

“Also, there could be a monetary cost to the council from an increase in uncollectible bad debt and legal fees, which to some extent would negate the savings,” the councillor said. The officer replied: “In terms of the £420,000 we have only put an estimate of £350,000 into the medium term financial strategy as we are conscious it maybe impacts some individuals.

“We have retained in the scheme the minimum level of support (lowest income householders can claim) at 85 per cent, which the current scheme has. And we are recommending we use some of the potential savings to increase the reserve we have got available for the discretionary scheme so if somebody is adversely impacted, they will have that support mechanism to fall back on.”

The officer explained having an income banded scheme will make it easier for residents to see what their circumstances are, what their income falls into and whether they would be eligible to make a claim. The officer highlighted 315 people responded to a consultation about the proposed changes with the majority of those in favour of a switch to income banded scheme.

“Moving to a simplified scheme will help reduce the number of unsuccessful claims, reduce backlogs and overall provide a better service for our residents," the officer added. Councillor Richard Holt asked: “Do you think this plan will result in more or less people claiming the benefit?”

The officer replied: “I don’t think it is possible to answer because it very much depends on the circumstances of the individual. I would imagine the scheme is going to be as generous as it is now, possibly a little bit more.

“It depends on the economy as well in terms of how things recover and the potential for cost of living impacts.” The members of the Resource and Delivering Value Scrutiny Board, at the meeting on October 14, agreed to support the changes.

The proposals will now go before Solihull Council’s next cabinet meeting on November 14.