LCTS Communications Update - 7 December - Final Extra Questions

Council tax reductions schemes – Certainty of Funding for Parish and Town Councils

Q: As a parish when will I know the impact of council tax reductions schemes on my tax base?

There has been no change in the prescribed period for a billing authority to notify precepting authorities of the council tax base. Billing authorities should notify precepting authorities of the council tax base between 1 December and 31January.

Q: Will parish and town councils be subject to referendum principles?

The Secretary of State intends to announce his proposals for excessiveness principles alongside the provisional local government finance settlement, likely to be mid December. 

Q:  When will the final authority allocations for the funding for council tax support, including the funding attributable to the parish share of council tax bill, be available?

We propose to announce the final authority allocations for the funding for council tax support, including the funding attributable to the cumulative parish share of the council tax bill, alongside the provisional local government finance settlement, likely to be mid December. 

This amount is based on local precepting authority shares of the billing authority area Band D council tax bill and should only been seen as an indicative figure that acts as a starting point for discussions with billing authorities.

Precisely how much funding should be passed down will depend on a number of factors, including the design of the scheme and the number of claimants in the local precepting authority area, both of which could change from year to year.

The total amount of funding allocated to local authorities is 90% of forecast subsidised council tax benefit expenditure for 2013-14. Depending on the local scheme adopted the funding may not completely offset the reduction in the council tax base.  

Q: How should funding be passed down to parish and town councils – should this be part of the precept?

In allocating the local precepting authority funding to billing authorities it is Government's clear expectation that billing authorities will work with parish and town councils to pass down funding so that their precepts can be reduced reflecting, to a greater or lesser extent depending on local factors, reductions in their council tax base.

It is up to parish / town councils and billing authorities to consider and agree the most appropriate mechanism for providing the funding.

The intention of the funding being provided to all authorities is that it is income that reduces their council tax requirement, which will offset to some degree, depending on the local scheme adopted, the application of discounts that reduces the council tax base.

This is shown in Fig 5.1 of Chapter 5 of the Government response to the consultation on localising council tax support. This is available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/15326/Annex_A_Council_tax_base_consultation_response_-_07_Novt_-_v3__4_.pdf

Where the cost of a local scheme adopted is within the funding made available the reduction in the tax base does not result in upward pressure on the band D bill.

In the case of parish / town councils, the Government cannot pay the funding directly.

To replicate that impact for a parish / town council the expectation is that where there are recipients of local council tax support within the parish / town council, the billing authority should pass down funding. That funding should also reduce the council tax requirement of the parish / town council and in turn reduce the level of the precept required.

This can therefore reduce the increase in the parish element of the band D bill that may otherwise occur as a result of a lower tax base, where there are recipients of local council tax support within the parish / town council.

Q: When should:

·        A billing authority provide information over the level of funding that will be provided?

·        A parish / town council issue its precept?

There has not been a change in the timetable for setting budgets as a result of localising council tax support. Furthermore no timetable has been set for the billing authority to  provide information to the parish / town council over the level of funding that will be provided.

Parish / town councils and billing authorities should work together so that all tiers of local government can make the appropriate budgetary decisions in a timely way within the existing council tax setting timetable.