Report of the City Treasurer

This report proposes changes to the Council’s Council Tax Support Scheme so that the scheme remains fit for purpose as working age residents in receipt of welfare benefits are moved onto Universal Credit. The report seeks approval from the Executive to formally consult on the proposals that change the scheme for working age residents in receipt of Universal Credit.

The Committee considered a report of the City Treasurer which set out proposed changes to the Council’s Council Tax Support Scheme to enable the scheme to remain fit for purpose as working age residents in receipt of welfare benefits were moved onto Universal Credit. The report also sought approval to formally consult on the proposals.

The Director of Customer Services and Transactions referred to the main points and themes within the report which included:-

·                The background to the current scheme, following the localisation of Council Tax Support;

·                Details of Manchester’s current scheme, which was based on the default provisions offered by the government in 2012 and where possible used the DWP assessment of income and needs, minimising the need for further means-testing by the local authority;

·                The impact of Universal Credit in Manchester and its impact on Council Tax Support;

·                Issues with aligning the scheme with Universal Credit and proposals to mitigate and respond to these issues;

·                Proposed changes to the scheme which would come into effect from 1 April 2019 in respect of people entitled to Universal Credit;

·                The cost of making the proposed changes to the scheme;

·                Details of financial modelling and impacts of a banded scheme; and

·                A proposal to go out to consultation on the proposed changes between 13 September and 31 October 2018, with the responses along with the final proposals brought back to Scrutiny Committee before approval by the Executive in December 2018.

Some of the key points that arose from the Committees discussions were:-

·                There was support in relation to the proposed changes to the scheme to enable it to remain fit for purpose as working age residents in receipt of welfare benefits were moved onto Universal Credit;

·                Strong Concern was raised by Members that the scheme still supported historic changes that had been made to the scheme in 2017 to take into account the Government’s welfare reform changes that affected all other means tested benefits.  Specifically this was in relation to where the Council had agreed to exclude additional applicable amounts in council tax support to families where a third or subsequent child was born or joined a household on or after 1 April 2017, which aligned to the Housing Benefit rules.

·                Clarification was sought as to when the above rule in relation to council tax support applied from;

·                Was it possible to estimate the cost to the Council if the rule to exclude additional applicable amounts in council tax support to families with a third or subsequent child was not in place; and

·                Would it be possible for the Council to reconsider its stance on this part of the scheme as part of the proposed consultation.

The Director of Customer Services and Transactions advised that the decision to enforce the provisions set out in regulations to exclude additional applicable amounts in the Council Tax Support Scheme to families with a third or subsequent child was agreed by the Executive in 2017 and there was currently no proposals to look to change this provision. The only changes proposed to the scheme that the Executive were being asked to consider where in relation to working age residents in receipt of welfare benefits who were being moved onto Universal Credit.

It was confirmed that the provision to exclude additional applicable amounts in the scheme to families with a third or subsequent child only applied to families with two or more children who had applied for support from 1 April 2017.

In terms of cost to the Council, the Director of Customer Services and Transactions advised that the provision had impacted in the region of 633 families in Manchester and had resulted in savings to the Council of approximately £2000

The Executive Member for Finance and Human Resources acknowledged the concerns that had been raised by the Committee around the capping of the payment of council tax support to families with two or more children. He clarified that the proposed changes to the scheme that were before the Committee today were in relation to working age residents in receipt of welfare benefits who were being moved onto Universal Credit, however, he advised that the provision of council tax support payments to households with two or more children could be looked at again by the Executive if the Committee felt strongly enough about this to put forward an appropriate recommendation to the Executive.

Decision

The Committee:-

(1)       supports the proposed changes to the Council Tax Support Scheme in relation to working age residents in receipt of welfare benefits who were being moved onto Universal Credit.

(2)       requests, as a matter of urgency, that the Executive re-consider the current part of the scheme to exclude additional applicable amounts in the Council Tax Support Scheme to families with a third or subsequent child; and

(3)       requests that Officers submit a further report to the Committee, following the consultation period, with final proposals to the scheme prior to the Executive making its final decision.