Winners and losers – council tweaks tax reduction system but is mismanagement to blame?

Cash-strapped Hastings Borough Council (HBC) is reviewing how it pays out cash to help the poorest people in the community deal with their council tax bills.

Its says that to keep the scheme as fair as possible and in line with the needs of the community it is inviting the public to take part in a wider consultation process as it looks at ways to deal with having less money to fund its ‘Council tax Reduction Scheme’.

At the moment people on the lowest income can receive up to a 100 per cent reduction in their council tax bills and Councillor Judy Rogers, lead councillor for corporate services stresses that HBC is not proposing to remove the 100 per cent reduction for those who need it.

Ms Rogers says: “The changes do not apply to pensioners as they have a different scheme set by the government. The scheme began in April 2013 and has not changed since then. Because government grants are less, the council needs to make changes to the system for 2019 and 2020.”

The main changes that are proposed are:

  • To increase the ‘taper’ used in the calculation from 20per cent to 30 per cent. This means taxpayers who earn more will pay more towards their council tax bill.
  • To apply a flat rate deduction of £5 per week per household for 18 year olds and above who are not either the claimant or partner. Some taxpayers will gain from this change, others will lose.
  • To limit the amount of council tax reduction awarded to a Band D property. This means that for those living in a Band E, or Band F property, their reduction would be calculated using the Band D amount for council tax.
  • To apply a flat rate deduction of £17.50 for all earners. Some taxpayers will gain from this change, others will lose.

Council leader Peter Chowney said: “This is a scheme that was introduced a few years back to replace Council Tax benefit.  Since then, the government lump sum has been cut back year on year and is supposed to be part of our overall grant settlement – but that’s disappearing in a couple of years entirely. So we’re left with a council tax reduction scheme that costs Hastings Council around £1.5m a year, plus administration.

“We have a manifesto commitment to maintain our 100 per cent council tax reduction for the poorest in the borough – we’re one of only 28 councils that still do that.

“One of the complications with the current scheme is that because people’s Universal Credit often changes from one week to the next, this means their council tax reduction has to be recalculated every week, and they have to receive a new council tax bill every week, which is cumbersome and expensive to do.”

Councillor Rob Lee who leads the Conservative group on HBC worries that what he sees as mismanagement of the council’s resources by the ruling Labour group will hit the poorest in the community he told Hastings In Focus today: “We have supported the council with the council tax reduction scheme as we believe that helping people who struggle to pay their bills is the right thing to do.

“The Labour led mismanagement of the money at HBC is now so bad that it will have a negative effect on the poorest in the town. This is what you get with socialism every time, the money and opportunities are squandered the funds run out and poorest suffer.”

For further information and to complete the consultation survey online visit www.hastings.gov.uk. Click on Council Tax Reduction Scheme on the home page.  For those who do not have access to a computer,  the Community Contact Centre at the Town Hall, open during normal working hours Monday – Friday (1000 opening Wednesday) has computers available for the public to use. The consultation ends on 28 October 2018.

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