Norwich City Council to quiz the public on possible Council Tax rises and cuts to support for people on low incomes
13:59 05 September 2012
Bosses at City Hall in Norwich are to launch a consultation over whether to increase Council Tax for the first time in three years.
Norwich City Council’s portion of the tax has been frozen for the past two financial years, however changes to the way council tax benefit is dealt with, as well as an expected budget shortfall mean this may have to change.
The authority wants to hear people’s views on both issues and is looking at two options to deal with chages to council tax benefit, one of which could see it cut the support for people on low or no income.
The changes could come about because in April 2013 the government plans to abolish the existing council tax benefit scheme which helps those on low or no income pay their council tax.
It currently sets the rules on who can claim and how much benefit they receive and currently funds the entire scheme.
However, local councils have been told to come up with their own locally run scheme called the council tax reduction scheme. As a result, the city council will receive a grant for council tax benefit which it estimated will be 10 per cent less than in previous years.
At present, the authority pays council tax benefit to about 19,000 households. This amounts to about £15 million in council tax benefit per year, which means once the new scheme comes into effect it will receive about £1.5 million less.
Of these households, an estimated 40 per cent are of a pensionable age and will not be affected as the government has also said pensioner households cannot lose any of their council tax benefit.
Two main options have been looked at by a cross-party working group and these are:
Option 1: Raising additional income by reducing council tax exemptions and discounts for second homes and empty properties and fund the remaining shortfall from the budgets of the city and Norfolk County Council and Norfolk Police Authority.
Option 2: Raising additional income by reducing council tax exemptions and discounts for second homes and empty properties and cutting support for people on low or no incomes.
The council is also preparing its budget for 2013-14 and needs to find a further £1.6 million of savings or additional income, in addition to the £20 million in savings over the past four years.
It also has to decide whether or not to increase council tax. It says that if it increases that by 2.5 per cent (or eight pence per week for a Band B property), this could raise around £250,000, which could pay for additional services and projects in the city.
Results from the wider consultation will be reviewed by cabinet on January 16. The final decision on the cabinet tax reduction scheme will be taken by full council on January 29 and on the council’s budget and council tax on February 21.
The council is consulting with the county council and police authority over the tax exemption issue - the other two council tax raising authorities - which will influence the draft scheme which goes to consultation.
Cabinet members meet on Wednesday, September 12 to decide which option to consult the public on. The consultation will run from September 13 to December 6 and will also seek people’s views on the council’s budget for 2013-14 and council tax. Councillors will use all feedback received to help them make final decisions next year.
Alan Waters, deputy leader and portfolio holder for resources, said: “These changes to council tax benefit are being brought in by the government and we have to make them work as best we can. They confront us with some very hard choices indeed and setting up a local council tax benefit scheme would cost a lot in time and resources.
“We are committed to listening to what people have to say and to trying to protect the most vulnerable. A lot of the people who may lose out are working people on low incomes who are already struggling so it is a very difficult set of options.”