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RESOLVED:
 
1. 
That
Cabinet and full Council note the contents of the report and the
financial implications outlined within the report and that the
report be referred to full Council.

 
2. 
That
Cabinet recommend to full Council that Members, recognising both
the ongoing cost of living crisis in Hackney and the financial
constraints placed on the Council, agree to revise the
Council’s current Council Tax Reduction Scheme by reducing
the minimum contribution which all working age CTRS claimants have
to pay from 15% to 10% of their Council Tax liability from the 1
April 2024.

 
REASONS FOR DECISION
 
When the Council last agreed to amend the  Council Tax Reduction Scheme in 2020, it also
committed officers to undertake a review of the revised scheme and
further reduce the maximum contribution to 10% by 2025/26 and move
to a fully funded scheme by 2030.
 
Whilst seeking to provide additional financial support to
low income households the scope for amending the scheme is
constrained by the need to manage ongoing reductions in Central
Government funding. Over the period 2010-11 to 2023-24, the Council
has suffered a £150m real terms reduction in its Spending
Power which is equivalent to 33%. The Council therefore needs to
strike a balance between the need to provide extra support to
residents who we think need it, while maintaining a scheme that is
financially sustainable for the Council’s wider budget and
limits the impact on our ability to deliver essential front line
services that residents depend on.
 
The option of decreasing minimum contributions from 15% to
10% balances both the increasing financial pressures that our low
income households face, against the ongoing cuts in government
funding. The change will affect working age households only as the
Council is legally prevented from making any changes to the scheme
that will reduce the level of support payable to a pensioner
household.
 
DETAILS OF ALTERNATIVE OPTIONS CONSIDERED AND
REJECTED
 
As part of the review process, the Benefits & Housing
Needs Service commissioned external consultants, Policy in
Practice, to carry out the analytical assessment of the revised
scheme and to model the financial impact on the Council and on
residents.
 
Do nothing -  Policy in Practice
modelling indicates that if we retain the current CTRS scheme into
2024/25 there will still be a cost increase in delivering the
scheme as a consequence of increased Council Tax charges and the
uprating of applicable amounts. For modelling purposes only a
maximum 4.99% increase in Council Tax liability has been assumed
along with a benefit uprating of 5.4% (based on projected CPI
inflation figures), recognising the Council has yet to make a
decision on the actual Council Tax increase for 2024/25. If we make
no changes to the scheme costs of the scheme are estimated to rise
from £29.32m to £31.01m, an increase of £1.69m or
5.78%.
 
Although the Council's previous commitment was to bring
forward a reduction in the maximum contribution to 10% by 2025/26,
it was considered appropriate to implement this change earlier,
given the depth of the cost of living crisis and the impact on low
income residents. 
 
Policy in Practice were also asked to model the impact of
additional changes to the scheme administration intended to make
the scheme more straightforward and reduce the administrative
burden on the Council, through simplification of the application
process and simplifying the rules related to both earnings
disregards (i.e. the amount of earned income taken into account)
and non-dependant deductions (i.e. the assumed contribution of
other adults living in the household). These changes would increase
the total scheme costs by an additional £1.00m in comparison
to estimated costs set out in para 1.11.
 
As these additional changes would potentially have
significant additional cost increases to the scheme as well as the
potential for unintended adverse impacts on groups of residents
(e.g. reducing support for larger families), we propose to carry
out further modelling and consultation and consider these as part
of future changes for implementation at a later date.