Demand Regs for Council Tax Bills - UPDATE

From:

Hülya Mustafa

Deputy Director, Council Tax and Business Rates

Please note  below, which has also been sent to all Chief Finance Officers:

I was hoping to be able to share draft amendments to the Demand Notice Regs with you this week, but that has not been possible. Subject to parliamentary approval of the 2% flex, an amendment to the Council Tax (Demand Notices) (England) Regulations 2011 will be signed by a Minister on Friday and I will send them to you then.

In the meantime, thank you to those of you who have helped shaped our approach, and apologies for the delay and change of direction since my letter of 17 December. This email is to provide an update setting out the intended billing approach which the Regs will put into effect, to enable you to do some testing with software and printing. Please do not do your billing on the basis of this email.

1. The Demand Notice regs will now require what is being referred to in lay terms as an ‘itemised bill’. Ie Tax payers must be informed on the face of the 2016-17 council tax bill what part of the increase is being used to fund adult social care. The part of the increase attributable to the use of the adult social care flexibility (maximum 2%) must be shown separately from the part of the increase that is not attributable to it. Percentage figures will need to be shown to 1 decimal place as is the norm on CT bills.

Having considered local authority representations, and the time available to implement changes to the format of bills in time for 2016-17, the regulations (which are being finalised, and which we will share with you as soon as possible) offer local authorities a choice of two approaches. 

Option A (which is the Secretary of State’s preferred approach) requires the billing authority to separately state i) the percentage increase in the adult social care authority’s council tax (before the use of the flexibility) together with the cash amount represented by that percentage increase and ii) the cash amount attributable to the ASC flexibility. So the ASC authority will have two lines on the bill. One for the authority’s non-ASC percentage increase and cash amount; and one for the authorities’ ASC-related  cash amount (without a percentage increase).

A short explanatory text  must be included on the face of the bill explaining  “[Authority’s] council tax includes a new charge for adult social care services”.

These things are tricky to explain in words, so the below is an illustration. Depending on your bill format, this might look like this:

X  county Council                                                               2%                                                                          £1290

X County Council*                                                             --                                                                             £30

Y District council                                                                2%                                                                          £100

Fire                                                                                       2%                                                                          £50

Overall percentage increase                                           2%

Annual charge for this financial year                                                                                                         £1470

* [Authority’s] council tax includes a new charge for adult social care services. [you may add any weblink or further info you wish.]

 Where Option A  is not practicable, Option B requires the billing authority to separately state the percentage increase in the adult social care authority’s council tax attributable to the use of the flexibility, together with short explanatory text.

Depending on your bill format, this might look like this:

The top portion of the bill to say:

X  county Council*                                                           2%+2%                                                                  £1320

Y District council                                                               2%                                                                           £100

Fire                                                                                       2%                                                                          £50

Overall percentage increase                                           2%

Annual charge for this financial year                                                                                                          £1470

*[Authority’s] council tax includes a new charge for adult social care services. [you may add any weblink or further info you wish.]

2) The regs amendment will place county councils under a duty to provide billing authorities with a range of  information to be included on the demand notice

3) Billing authorities will also be required to provide specific information about the purpose of the adult social care ‘Precept’ in the information that must be supplied with demand notices. The required text is as follows:

“The Secretary of State for Communities and Local Government made an offer to adult social care authorities in his  letter of [date][footnote]. “Adult social care authorities” are local authorities which have functions under Part 1 of the Care Act 2014 (“adult social care functions”),  namely county councils in England, districts councils for an area in England for which there is no county council, London borough councils, the Common Council of the City of London and the Council of the Isles of Scilly.

The offer was the option of an adult social care authority being able to increase its relevant basic amount of council tax for the financial year beginning in 2016 by an additional 2% without holding a referendum, to assist it in meeting expenditure on adult social care functions. Subject to the annual approval of the House of Commons, the Secretary of State intends to offer the option of setting this additional increase each year up to and including 2019-20. In relation to the financial year beginning in 2016 the Secretary of State has determined (and the House of Commons has approved) a referendum threshold of 4% (comprising 2% for expenditure on adult social care and 2% for other expenditure), for adult social care authorities. These authorities may therefore increase their relevant basic amount of council tax up to this percentage in 2016 without holding a referendum.”.

4) Finally, it is the Secretary of State’s intention to revisit the regulations respect of the years 2017-18 onwards, and require all billing authorities to implement Option A. Local authority views will be sought on this, and further regulations prepared in due course.

I hope this is helpful. If you have any queries, please respond to this email address and we’ll get back to you.

Best wishes

Hülya Mustafa

Deputy Director, Council Tax and Business Rates

Tel: 0303 444 2133

PA, Trevor Clarke: 0303 444 3410

SE, 2^nd Floor Fry

2 Marsham Street