Agenda item

Cabinet Portfolio:                 Corporate Services and Finance

Strategic Directorate:           Finance and Customer Services

Consideration was given to a report submitted by the Strategic Director of Finance and Customer Services in respect of Council Tax Support and the impact of the introduction of Universal Credit in Rotherham on 11 July 2018.

It was reported that Universal Credit included Housing Benefit, but did not include local Council Tax Support for which residents were required to apply directly to the Council. There was a concern, supported by anecdotal evidence from other councils and reports published on the subject, that following the introduction of Universal Credit there was a risk that there could potentially be a decline in Council Tax Support applications. This was due to the Council Tax Support application becoming an additional and separate process to the Universal Credit application which is made directly to the Department for Work and Pensions (DWP).

The Strategic Director explained that where the decline in Council Tax Support applications was as a result of a genuine reduction in the level of support required, it would have a positive impact to the Council’s budget with Council Tax income increasing. However, if the decline was a result of those who would be entitled to support failing to claim, it would result in an increase in Council Tax arrears together with the costs of collection and for Universal Credit claimants an increase in personal debt levels.

Prior to being rolled out in Rotherham in July 2018 only a relatively low number of Rotherham residents were claiming Universal Credit, however the Council Tax Support caseload had significantly decreased by 1,886 from April 2017 to July 2018. In the three months following the roll out, the caseload decreased by a further 541. This fall was impacted by a number of factors including a move of some claimants onto Universal Credit:

·         A general change in the economy with more people moving into work and no longer qualifying

·         An increase in the state pension credit age resulting in lower numbers of pension age applicants claiming Council Tax Support

·         Changes to Rotherham’s Council Tax Support scheme which came into effect in April 2018

The report stated that it was difficult to assess accurately the degree to which those on Universal Credit not claiming Council Tax Support had been responsible for the decline in caseload particularly as not all claimants groups were affected prior to roll out. Since December 2015, only a small client group (single job seekers) had been compelled to apply for Universal Credit regardless of where they lived and other household groups in certain areas of Rotherham being introduced in the past six months.

The report went on to detail the actions that the Revenues and Benefits Service had introduced to encourage those potentially entitled to Council Tax Support to apply.

Members sought assurances in respect of the work undertaken to communicate changes to residents. In response, it was explained that there had been a continued trend of a decline in Council Tax Support applicants, which had been the case prior to the introduction of Universal Credit. A number of initiatives were started to maximise take up, which had proved to be fairly successful.

The service had not seen a significant increase in debt recovery as a result of Universal Credit, but it was speculated that it may start to become an issue in twelve months time. The Revenue and Benefits Services were not aware of specific private housing rents issues, but would discuss debit issues and signpost to debt advice services.

In response to a question about the methods used to promote claiming Council Tax Support, it was explained that customers were advised the scheme when recovery notices were issued within four days of instalments being missed. In addition, where mobile phone numbers had been provided, the service sent targeted text messages to customers.

Resolved:-

1.    That the report be noted.

2.    That the information be used to inform future work in respect of the impact of Universal Credit.