ISLE OF WIGHT COUNCIL FACES TOUGH CHOICES ON COUNCIL TAX SUPPORT SCHEME
Working age Islanders who claim council tax support may lose around £2 a week from next April – as the council searches to find £7.5 million of savings in its annual budget.
Low income claimants can currently get 80 per cent support for their council tax bills, but under a change proposed this could fall to 70 per cent, or by an average £2.06 a week.
The reduction is one option to go before a meeting of the Full Council on 17 January – but if approved would only affect working age claimants and not pensioners.
The council would also continue to offer its ‘exceptional hardship fund’ to help those in most serious difficulty.
“Since we were elected last May, the council’s Cabinet has been working tirelessly to explore all areas of the council’s finances and how we can deliver the best services we can in the face of some very difficult decisions on savings,” said council leader, Councillor Dave Stewart.
“We are determined to invest wisely in the Island’s future and act prudently to balance the council’s books – but there is no hiding from the fact that we are faced with some tough choices.
“It is with a very heavy heart that we are having to consider this option, but it is important to note that we went out to consultation on local council tax support between August and October last year, and the majority of respondents supported a reduction from 80 per cent to either 75 or 70 per cent.”
Four years ago local council tax support was fully centrally funded by the government – but since then local council tax payers have increasingly been asked to fund the difference. There has been a £6 million fall in central funding since 2013.
Councillor Stewart said: “The council has been placed in a very difficult position of providing a scheme to protect low income households while central funding is cut year on year and we are still required to provide support to pensioners as in 2013. It means we are continually needing to review our local council tax support scheme, and balance this alongside support for many other vital services.
“In terms of the council’s overall budget we are currently engaging collaboratively with all opposition groups on the council, to ensure we are open to a wide range of ideas and suggestions.
“We are also consulting widely with Islanders and stakeholders over the coming weeks to ensure we have extensive feedback before we set the annual budget at Full Council on 28 February.”
The report on local council tax support to Full Council on 17 January, can be found at: https://www.iwight.com/Meetings/committees/mod-council/17-1-18/Paper D.pdf
If approved, it is estimated the reduction in support from 80 per cent to 70 per cent would reduce the cost of the council tax support scheme by approximately £570,000 (including the police and town and parish council preceptors share) next year.
- Prior to 2013 claimants on very low incomes could get 100 per cent of their council tax paid, with central government paying a grant to local councils to cover the whole cost. Since 2013 the government has transferred the responsibility to local councils and has reduced its funding support year on year.
- The overall cost of the scheme for 2018/19 on the Island is estimated at £10.9 million.
- The shortfall between government funding and the cost of the scheme for the council is £3 million.
- Government funding for 2018/19 is due to fall by a further 7.3 per cent or £0.448 million.
- The government has protected pensioners by not allowing any reduction in their support.
- There are currently 11,397 Islanders who claim local council tax support, of whom 5,719 are working age claimants, and 5,678 are pensioners.
- The total of those who claim local council tax support has fallen from 14,604 in 2013/14 to 11,397 in 2017/18.
- The option being recommended to Full Council would also limit local council tax support to a maximum of (no higher than) a council tax band C charge.
- Single person council tax discount is a separate statutory requirement, which is unaffected, and not part of the local council tax support scheme.