Council bosses are set to maintain the council tax support it offers to struggling working age families but warned further cuts could harm the scheme.
Hartlepool Borough Council’s finance and policy committee is to decide on the local council tax support (LCTS) scheme for the coming year.
Funding transferred by the Government for 2013/14 LCTS schemes was cut overall by 10% nationally.
Council’s are required to fully protect low income pensioners eligible for support, which means the initial funding cut falls on working age households and built a 20% reduction for the group.
The council has avoided implementing LCTS cuts of 20% over the last five years, limiting the reduction to 12% since 2014/15 which is recommended to be maintained for 2019/2020.
However, council bosses warned if funding from council tax collection or government grants drops greater, cuts might be needed to the support scheme.
A report from the council’s director of finance and policy, Chris Little, stated previous arrangements from the Government were better for all.
It said: “It would have been much clearer for councils and the public, if funding for LCTS schemes had continued to be paid as a specific grant.
“The new arrangements have a significantly greater impact on councils which are more dependent on government grant and have higher levels of deprivation.
“The council has determined, as part of its strategy to support vulnerable households affected by the national welfare reforms, to avoid implementing LCTS cuts of 20%.
“If the future settlement funding profile and the council’s tax base projections are significantly different to current forecasts, the ability of the council to sustain a scheme involving a 12% LCTS cut will need to be re-evaluated.”
The cuts came after in 2013 the Government abolished the former national council tax benefit and replaced it with a requirement for councils to determine their own LCTS.
Funding for individual councils was moved to be included in the Core Revenue Grant allocation for each authority.
Other Tees Valley councils have operated LCTS schemes involving cuts of 20% since April 2013, with Redcar and Cleveland moving to 17.5% from 2017/18 and Middlesbrough introducing a 15% scheme from 2018/19.
The net costs of LCTS awards is expected to be £11.96million for 2018/19, which is predicted to rise to £12.33million in 2019/2020.
A LCTS Risk Reserve has been established to support the scheme which is proposed to be maintained at £0.3million to manage any in-year financial risks that may emerge.
A decision will be made at the finance and policy committee meeting on Monday, October 29, from 10am at the Civic Centre.
Nic Marko , Local Democracy Reporting Service.