Agenda item

(A report by Russell Stone, Director of Finance (S151 Officer))

The Director of Finance (S151 Officer) presented a report which detailed the annual review of the Local Council Tax Support (LCTS) Scheme for working-age households. Cabinet was reminded that the Council is required to review its scheme each year and consult with precepting authorities and other stakeholders. The scheme for pension-age households remains prescribed by Government and is not subject to local discretion. The report included consultation results and modelling within the supporting Appendix 1.

The current scheme provided up to 100% support for households with children and up to 85% support for other working-age households. The report outlined the outcome of the consultation agreed by Cabinet in September 2025, which sought views on three options for 2026/27:

·         Option 1: Retain the current maximum support levels.

·         Option 2: Reduce support to 90% for lone parents, 80% for couples with children, and 75% for all other households.

·         Option 3: Reduce support to 90% for lone parents, 80% for couples with children, and 70% for all other households.

Consultation responses indicated a modest level of engagement, with the majority supporting a reduction in support. The report recommended Option 2 as the preferred approach, balancing the need to reduce scheme costs with the aim of minimising the impact on vulnerable households. The estimated saving from Option 2 was approximately £332,000, compared to £421,000 for Option 3. The report also confirmed that the scheme would continue to include discretionary provisions for exceptional hardship cases and would be uprated annually in line with Department for Work and Pensions (DWP) allowances and premiums.

Members acknowledged the financial pressures facing the Council and the need to deliver a balanced budget while continuing to support those most in need. The discussion recognised that the proposed changes represented a difficult but necessary decision, given the wider economic context and the Council’s duty to maintain financial sustainability.

It was noted that the recommended option sought to limit reductions for households with children and lone parents, while introducing a fairer contribution for other working-age households. The inclusion of an exceptional hardship provision was welcomed as an important safeguard for those experiencing severe financial difficulty.

Members also reflected on the consultation process, noting the low level of responses and the importance of exploring alternative methods of engagement in future to ensure broader participation. The need for clear communication with residents about the changes and the support available was emphasised.

The discussion concluded that Option 2 provided the most balanced approach, reducing scheme costs without imposing the more significant reductions proposed under Option 3.

The recommendation was moved by Councillor John Baxter and seconded by Councillor Claire Rylott.

Resolved:

1.    That Full Council be recommended to approve a change to the maximum level of support to 90% for lone parents, 80% for couples with children and 75% for all other households with the scheme uprated in line with DWP’s annual update of allowances and premiums for 2026/27; and

2.    That approval for developing the 2026/27 scheme rules in accordance with recommendation 1, above, be delegated to the Director of Finance and Section 151 Officer, in consultation with the Portfolio Holder for Finance as appropriate, including prescribed, administrative and minor changes.