Draft Local Authorities (Contracting Out of Tax Billing, Collection and Enforcement Functions) (Amendment) (Wales) Order 2014
The Committee consisted of the following Members:
† Blackman, Bob (Harrow East) (Con)
† Campbell, Mr Ronnie (Blyth Valley) (Lab)
† Crabb, Stephen (Parliamentary Under-Secretary of State for Wales)
† Jones, Susan Elan (Clwyd South) (Lab)
† Kawczynski, Daniel (Shrewsbury and Atcham) (Con)
† McCartney, Jason (Colne Valley) (Con)
† Mosley, Stephen (City of Chester) (Con)
† Murphy, Paul (Torfaen) (Lab)
† Murray, Sheryll (South East Cornwall) (Con)
Roy, Lindsay (Glenrothes) (Lab)
† Ruane, Chris (Vale of Clwyd) (Lab)
† Smith, Owen (Pontypridd) (Lab)
† Tomlinson, Justin (North Swindon) (Con)
Tredinnick, David (Bosworth) (Con)
† Williams, Hywel (Arfon) (PC)
† Williams, Roger (Brecon and Radnorshire) (LD)
† Wright, Simon (Norwich South) (LD)
Fergus Reid, Committee Clerk
† attended the Committee
Seventh Delegated Legislation Committee
Tuesday 18 March 2014
[Mark Pritchard in the Chair]
Draft Local Authorities (Contracting Out of Tax Billing, Collection and Enforcement Functions) (Amendment) (Wales) Order 2014
2.30 pm
The Parliamentary Under-Secretary of State for Wales (Stephen Crabb): I beg to move,
That the Committee has considered the draft Local Authorities (Contracting Out of Tax Billing, Collection and Enforcement Functions) (Amendment) (Wales) Order 2014.
May I start, Mr Pritchard, by saying what a pleasure it is to serve under your chairmanship for the first time? I hope the order will not detain the Committee too long.
The order was laid before the House on 24 February. Observant members of the Committee might remark that it looks similar to an order that we considered this time last year. That is because it is similar. Last year’s order was affected by a sunset clause on the regulations that gave rise to it. Hence, we are back, one year on, looking at a similar order driven by a similar set of regulations.
I will start by explaining the legislative background to the order, which is due to be considered in the other place later this month under the affirmative procedure. The Council Tax Reduction Schemes and Prescribed Requirements (Wales) Regulations 2012 and the Council Tax Reduction Schemes (Default Scheme) (Wales) Regulations 2012—we will call them the 2012 regulations—introduced council tax reduction schemes in Wales for 2013-14. Schemes introduced under those regulations are now operating as part of the council tax system in Wales.
However, as those regulations are limited to 2013-14 by virtue of the sunset clause I mentioned, which was agreed with Opposition parties in the National Assembly for Wales, a new set of regulations has been brought forward to govern the operation of the council tax reduction scheme from 2014-15 onwards: the Council Tax Reduction Schemes and Prescribed Requirements (Wales) Regulations 2013 and the Council Tax Reduction Schemes (Default Scheme) (Wales) Regulations 2013, which we will call the 2013 regulations. It is necessary, therefore, to update the references in the numerous pieces of interrelated subordinate legislation to take into account the new set of regulations, which will be in place from April 2014. That includes making the order we are considering this afternoon.
The order enables billing authorities in Wales to continue to contract out certain additional functions relating to the administration and enforcement of council tax following the making of the 2013 regulations, which will operate from the 2014-15 financial year onwards. This time last year, the Committee approved the Local
Authorities (Contracting Out of Tax Billing, Collection and Enforcement Functions) (Amendment) (Wales) Order 2013. That order enabled local authorities in Wales, under the Local Authorities (Contracting Out of Tax Billing, Collection and Enforcement Functions) Order 1996, to contract out functions connected with the administration and collection of council tax. We wish to ensure that local authorities in Wales continue to have the freedom to contract out those administrative functions. Therefore, the 2014 order amends the 1996 order for Wales, substituting references to the 2012 regulations with references to the 2013 regulations.The order will enable local authorities to continue to contract out the following administrative functions: the issuing of the council tax reduction decision letter; the payment of a reduction amount under certain circumstances, where the billing authority is of the opinion it would be appropriate; the serving of a penalty notice with a reduction in connection with an offence committed; and, finally, the repayment of an amount paid in connection with a penalty under a local scheme, where that penalty has subsequently been quashed.
While the order does not expand on the provisions that are currently in place for the administration of council tax reduction schemes, it carries out an essential function by enabling local authorities in Wales to continue to choose how to deliver their local schemes, whether that is by using internal resources, external providers or a mixture of both. It is important that we provide local authorities in Wales with the tools they need to deliver a cost-effective council tax system. I therefore commend the order to the Committee.
2.35 pm
Owen Smith (Pontypridd) (Lab): It is a great pleasure to serve under your chairmanship for the first time, Mr Pritchard.
As the Minister outlined, a complicated matrix of legislation would be amended by the draft order. However, the reason underpinning the order is not just the sunset clause, but the scrapping of council tax benefit by the Government at Westminster, imposing significant further costs on working people in Britain, particularly in Wales. When the Government cut council tax benefit and passed the responsibility for administering council tax reductions to local authorities in England, to the National Assembly in Wales and to the Scottish Parliament, they chose to cut by 10% the amount of money available to provide that vital support. Therefore, as the Institute for Fiscal Studies noted at the time, there was a shortfall that would lead to 320,000 of the poorest people in Wales being worse off to the tune of around £74 a year, unless the National Assembly, in our case, found additional funds to make up the shortfall. I am pleased to say that the Labour Administration in the National Assembly chose to find additional funds of £22 million from reserves to afford those 320,000 of the most vulnerable people additional support. That has led to 30,000 people in my constituency and some 12,000 in the Minister’s receiving that benefit.
In contrast, the situation in England is much worse. There is now a patchwork of provision; some places are providing support, but some are not. The IFS notes that as a result of the shortfall around 2.5 million households across England are worse off and 500,000 people have
been issued with court summonses for non-payment, in contrast to Wales, where very few people have been similarly disadvantaged.I hope that the Minister will acknowledge that the Welsh Government are to be commended for putting support in place. Indeed, the Government at Westminster should to be encouraged to look to the example set by the Welsh Government and similarly provide for the most vulnerable people in England. To administer the scheme, we need these provisions. The councils in Wales need to be able to contract out services, as they do with other services to do with council tax. For that reason, we hope that the draft order is passed as quickly as possible, and we do not oppose it.
2.38 pm
Stephen Crabb: I thank the shadow Minister for his contribution. He used it not to ask anything specific about the order, but to comment on the wider policy
that gave rise to it. Likewise, I would be happy to debate the wider policy of council tax reform with him. We could point out that council tax spending was just one area of spending that the previous Labour Government lost control of, and this Government will make no apologies for restoring order and stability to our national finances. We could point out that this Government have made resources available to the Welsh Government to freeze council tax, as has happened in England. We might want to use this opportunity to ask why residents in Wales do not benefit from a council tax freeze, when we have given money to the Welsh Government to enable that to happen. But that would be straying far beyond the specifics of the order in front of us. I thank the shadow Minister for his support for the order. We need not detain the Committee any longer.