Unified approach for council tax support to households most in need

This story was published 12 July 2022

A streamlined approach to providing financial support running into millions of pounds to households in the greatest need has been heralded as a vital step to helping to tackle the cost of living crisis.

Cllr Gareth Dadd

A policy to unify the provision of financial aid for council tax bills is set to be adopted from the spring of next year when a new council is launched to cover the whole of North Yorkshire.

Senior members will consider the proposals which will provide up to 100 per cent reductions on council tax bills for households on the lowest incomes.

A report which will be discussed at the next meeting of the authority’s executive on Tuesday, July 19, sets out how the new council tax reduction scheme will be introduced when the new North Yorkshire Council is established in April next year.

Deputy leader and executive member for finance, Cllr Gareth Dadd, said: “The move to streamline how we provide such an important scheme will benefit thousands of people across North Yorkshire.

“Rising costs have affected us all, but it is those who are on the lowest incomes who are feeling the effects the most, and this new scheme will be essential to ensure that they are given the greatest amount of support possible.

“The new approach to providing the council tax reduction scheme will not only make it easier for people to apply for support, but it will also help streamline its administration when the new council launches next year.

“As a council, we are committed to helping the most vulnerable in society, both financially and socially, and the proposed new scheme will be an important addition to that mission.”

The proposed scheme is expected to increase the overall level of support for the lowest income households, whilst reducing the administrative burden placed on the new council by the introduction of Universal Credit. 

The current structure has seen different approaches administered across North Yorkshire’s existing seven district and borough councils, which are the authorities responsible for the billing of council tax.

For instance, three of the current district councils in Craven, Hambleton and Scarborough still require working age applicants to pay a minimum amount of their council tax bills, with the greatest contribution being 12.5 per cent. The remaining districts and borough authorities allow working age applicants up to 100 per cent financial support for their council tax bills. 

The cost of introducing the new scheme is expected to be £38 million, and will require an additional £2.3 million for it to be delivered when compared to the current structure which is administered by North Yorkshire’s district and borough councils.

However, £2 million is set to be used from funding raised through a council tax discounts and premiums scheme, while the efficiencies achieved by introducing the unified approach are expected to cover the extra costs.

The cost of living crisis has escalated by soaring inflation with prices rising by 9.1 per cent a year in the UK - the highest rate for 40 years.

The Bank of England has warned that inflation could reach 11 per cent within months, as the cost of fuel, energy and food is putting increasing pressure on household budgets.

The new approach to the provision of the council tax reduction scheme is being proposed amid the biggest shake-up in local government in North Yorkshire in nearly half-a-century that is currently being undertaken to pave the way a devolution deal. 

The Government has stipulated that a key requirement for any devolution deal for North Yorkshire is for the current two-tier system of local government, with the county council and seven district councils, to be replaced by a single unitary authority.

City of York Council will continue as a unitary authority to run in tandem with the new North Yorkshire Council, which will launch on April 1 next year.

A deal to hand over decision-making powers and tens of millions of pounds in funding to political leaders in York and North Yorkshire is currently being negotiated with the Government, with an announcement on an offer for devolution expected this summer before public consultations are staged later in the year.

Council tax reduction was introduced by the Government in April 2013 to replace the previous council tax benefit scheme administered by the Department for Work and Pensions.

The new national scheme placed the duty to create a local scheme for applications from working age people on the authorities responsible for council tax billing.

However, support for pensioners is provided under regulations set out by the Government, and not the local scheme overseen by billing authorities.

The revised plans for a council tax reduction scheme for North Yorkshire are expected to be presented to a full council meeting for final approval in November. An eight-week consultation on the proposals is planned to be carried out from July 25 until September 18.