Council tax support rate due to be set for Hartlepool

Hartlepool Borough Council had maintained the same rate for its local council tax support (LCTS) scheme since 2014/15, but councillors on the Finance and Policy Committee called for it to be reviewed.

The council currently offers a 12% rate for local council tax support to working-age household claimants, and has done for the past six financial years.

This means those applicable for the scheme have to pay a minimum 12% of their council tax, with councils required to fully protect low income pensioners eligible for LCTS support.

People can apply for a reduced rate of council tax depending on their circumstances – income, number of children, benefits, residency status etc – and each council has their own scheme.

The consultation looked at retaining a 12% scheme, or introducing 14%, 16%, 18% or 20% schemes for 2020/21, after councillors claimed it could reduce the need for an overall council tax increase.

Almost two thirds (213) of the 330 who responded called for the scheme to remain at 12% and council finance chiefs also recommend the 12% level is maintained.

A report of council director of finance and policy Chris Little warned although a higher percentage of local council tax support (LCTS) would provide more council tax income, those struggling financially may not be able to afford it.

It said: “The options of higher LCTS percentages will increase the amount of council tax low income working age households will be required to pay.

“However, this income will become increasingly difficult to collect and increased provision for bad debts will need to be made, which will offset the initial income increase.

“In considering alternative LCTS levels, members need to balance the conflicts between increasing total Council Tax income in the short-term and the impact on low income households.

“The probability is that a higher level of LCTS will adversely impact on council tax collection levels, increase council tax arrears and therefore result in higher write offs.

“Based on experience over the last 6 years the continuation of a 12% LCTS would minimise the financial risks to the council and individual working age households for 2020/21.”

The council report notes if the LCTS level is increased to 14% it could lead to a potential reduction in the planned 2020/21 council tax increase by 0.33%.

If it was increased to 20% it could lead to a potential reduction in the council tax increase of 1.36% overall.

However council chiefs also stressed how the LCTS scheme is a key component of their strategy to support low income households.

A decision is to be made on the local council tax support scheme at the Finance and Policy Committee on Monday at 10am at the Civic Centre.