HC 943

Written evidence from the Department for Communities and Local Government

Thank you for the opportunity to discuss the recent NAO report on Council Tax Support with the Committee. The Committee asked for some further information on a small number of points, and this is attached as an annex to this letter. It may be useful if I additionally clarify two points.

Mr Ridley stated in response to Q65 that he thought the Department had written to councils on the subject of including child maintenance as income. In fact, although we had at that point received ministerial clearance for an update to the guidance, it has not yet been published. I can confirm that the revised guidance will be published shortly, and that local authorities will be notified.

There is a minor textual amendment to the transcript, to clarify exactly which parts of my answer to Q45 on the independent review of the policy are a direct quote from the legislation. It may also be useful for me to provide the exact wording which appears in section 9 of the Local Government Finance Act 2012:


(1) The Secretary of State shall make provision for an independent review of all council tax reduction schemes made under the provisions of this Act:

(a) to consider their effectiveness, efficiency, fairness and transparency and their impact on the localism agenda, and

(b) to make recommendations as to whether such schemes should be brought within universal credit.

(2) A review under subsection (1) shall take place within three years after this Act comes into effect.

I am happy to help further if the Committee have any further questions.

Sir Bob Kerslake
Permanent Secretary

28 January 2013



The Department issued guidance on work incentives in May 2012, and subsequently updated it in December 2012. This is available at https://www.gov.uk/government/collections/localising-council-tax-support


A change in the taper rate would affect people who are of working age and whose income exceeds their ‘applicable amount’. The applicable amount is the amount of income which they can receive and still receive maximum council tax support-it will vary from person to person depending on their individual characteristics and household composition. This income can be made up of benefits, earnings, other income, or a combination. The taper will continue to affect them until their income reaches the point at which council tax support is withdrawn completely. An increase in the taper rate results in council tax support being withdrawn at a faster rate.

The number of people who could be affected by a change in the taper rate is made up of:

(a) the number of people who are in full or partial receipt of an employment-related benefit (job-seeker’s allowance, income support or employment support allowance), added to; and

(b) the number of people who are means tested and could be part-way along the taper, ie whose income is above the level where it is topped up by an employment-related benefit, but below the level where council tax support is withdrawn completely.

The total 5 million caseload can be broken down as follows into 2.2 million pensioners, who will not be affected by a change in the taper rate, and 2.8 million working claimants:

¾ 3 local authorities (1%) have reduced the taper rate to 15%. This potentially affects approximately 21,000 working age claimants.

¾ 304 local authorities (93%) have retained the council tax benefit taper of 20%. This potentially affects approximately 2.5 million working age claimants.

¾ 19 local authorities (6%) have increased the taper rate above 20%. This potentially affects 225,000 claimants.

Neither (a) nor (b) includes pensioners, for whom the local council tax support scheme mirrors council tax benefit. These figures are based on council tax benefit claimants published in April 2012. DCLG does not collect this level of detail on current council tax support claimants.

The 19 local authorities who have increased the taper rate are:

¾ Blaby.

¾ Bracknell Forest.

¾ Brent.

¾ Broxbourne.

¾ Chesterfield.

¾ Crawley.

¾ Doncaster.

¾ Harrow.

¾ Lambeth.

¾ North Kesteven.

¾ Portsmouth.

¾ Rochdale.

¾ Salford.

¾ Sandwell.

¾ Southampton.

¾ Sutton.

¾ Windsor and Maidenhead.

¾ Wokingham.

¾ Trafford.


Extended payments

¾ 14 local authorities (4%) increased the period of extended payments.

¾ 310 local authorities (95%) kept four weeks of extended payments-the same as under council tax benefit.

¾ 2 local authorities (1%) removed extended payments. (Dover and Wakefield).

Earning disregards

¾ 44 local authorities (14%) increased the level of earnings disregards.

¾ 280 local authorities (86%) kept the council tax benefit levels.

¾ 2 local authorities (1%) reduced the level of earnings disregards (Shropshire and Rutland).

EMPTY HOMES (Qs 48–49, 53–54)

The empty homes premium can be charged on any home which has been unoccupied and ‘substantially unfurnished’ for a continuous period of at least two years. Any period of six weeks or less where the property is furnished or occupied is disregarded for the purpose of calculating the two year period. The decision on whether to apply the premium is a matter for the local authority, which will take into account any occupation of the property and any furniture and make a decision on whether the premium applies.

The premium is set up in this way because Ministers took a policy decision that they did not wish the premium to catch second homes. We don’t currently have any data which indicates that there is a widespread problem, but will investigate this further through the Council Tax Partnership Forum.

An empty property owned by a charity and whose use is for charitable purposes is exempt from council tax for up to six months (a Class B exemption). There has been a large increase in the number of Class B exemptions in 2013–14 (up by 16,645 or 382%). We queried this with local authorities when the data was compiled, and they have explained to us that it is related to the abolition of Class C exemptions in April 2013.

A Class C exemption was applicable to unoccupied and substantially unfurnished properties for up to 6 months. In April 2013 local authorities were given greater freedom in their treatment of empty properties, and Class C exemptions were abolished.

It seems that some properties which could have received a discount under either Class B or Class C were historically recorded under Class C, but are now being recorded under Class B. There was no benefit to be gained by being in one Class rather than another, as both Classes provide for a maximum exemption of up to six months. The granting of an exemption is a decision for the local authority-if they are not satisfied that a property can properly claim a Class B exemption, they will simply not grant it.


We do not gather this data; however, it is something which could be examined as part of the three-year review.


The 22 local authorities who included child maintenance in their calculations of income in their Year 1 schemes are:

¾ Bath & North East Somerset.

¾ Bolton (but limiting overall impact for those previously on 100% support to 8.5% reduction).

¾ Brentwood.

¾ Cannock Chase.

¾ Chelmsford (disregard £10 per week of maintenance only unless you get income support, income related employment & support allowance or income based jobseekers allowance).

¾ Colchester.

¾ Doncaster.

¾ Epping Forest (disregard first £15 per week per family).

¾ Huntingdonshire (disregard first £10).

¾ Maldon.

¾ Mendip.

¾ Rochford.

¾ Rushmoor.

¾ Sedgemoor (disregard £65.62 per week per child).

¾ Slough.

¾ South Somerset.

¾ Stafford.

¾ Tamworth.

¾ Taunton Deane.

¾ Tendring.

¾ Waverley.

¾ West Somerset.

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Prepared 10th March 2014