How viable is your council tax support scheme?

How viable is your
council tax support
scheme?
Wednesday 9 September
Policy in Practice
webinar

Housekeeping
www.policyinpractice.co.uk
● Audio check
● Please ask questions throughout
● Polls and a survey
● Aim to finish by 11:30
● Slides and recording will automatically follow
● Follow us on Twitter via @policy_practice

Today’s speakers
Janet Harkin
Head of Marketing
Policy in Practice
@jharkin
Zoe Charlesworth
Head of Policy
Policy in Practice
@ZoeCharleswort1
Paul Howarth
Policy Consultant
Policy in Practice
Sally Sanders
Head of Financial
Assessment
Enfield Council
@EnfieldCouncil
Dr Ben Fell
Head of Analysis
Policy in Practice
@DrBenFell

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Agenda
● How understanding of context can assist scheme design
● New analysis for the Welsh Government on the impact of Universal Credit on
rent and council tax arrears
● How Enfield Council is reviewing its council tax support scheme in light of
COVID-19
● How we model what the future may hold
● Questions and answers

666
Over to Zoe

777
Poll: In the light of COVID-19 what is
your main concern with your current
CTS?

Change and uncertainty
● Councils are seeing an increase in caseload (typically 20 - 50% by July 2020)
● 9.6m people on furlough (August 2020)
● 194,000 additional redundancies by July 2020 (ONS)
● 750,000 job losses since April 2020 (OBR)
● Out of work benefits and UC claims doubled to 2.7m by July 2020 (DWP)
Forthcoming changes
● 10% of furoughed workers likely to be made redundant by October 2020
(OBR)
● End of SEIS (October 2020)
● MIF to be reinstated
● Emergency benefit increases to end
● Brexit

COVID-19 is changing caseloads
Less disability Less likely to be working
More claimants in receipt of Universal Credit

Changing the CTR scheme with
economic uncertainty
Policy in Practice works with councils to help them meet their objectives for
scheme design
Data analysis to inform decisions using SHBE and CTR data
● The analysis councils require is changing
● Pre-COVID-19 change was driven by:
○ Cost
○ Impact of UC
● Recent analysis has required greater contextual information to inform
scheme design
○ the drivers of scheme redesign
○ the impact of scheme design

Drivers and impacts of CTR redesign

Impact of scheme design: collection
rates
www.policyinpractice.co.uk/publications
● Only council tax reduction scheme (CTRS) generosity and local poverty
levels were significantly associated with collection rates
● Council tax rates and collection practices (as captured by adherence to the
Citizens Advice and LGA Council Tax Protocol) were not significantly
associated with collection rates
Policy in Practice analysis for GLA

Impact of scheme design: arrears
Arrears
● A recent analysis for a London Borough showed a clear relationship between
level of arrears and level of support:
○ Households receiving the most support under the current working-age
CTR schemes (working households in receipt of Universal Credit and
protected groups) are also those households with lowest CT arrears.
○ Households who see the greatest reduction in CTR support compared to
the default scheme (working households in receipt of legacy benefits)
are the group with the highest CT arrears.

Average difference between the most generous and least generous is
£45/month (16% of standard allowance)
Scheme design can have an impact on poverty
● support those most in need (financial resilience)
● support those having most difficulty paying their CT (arrears)
The impact of CTR on poverty and debt

Interaction of poverty and collection rates
Poverty
● Local authorities with
higher levels of relative
deprivation tended to
report lower council tax
collection rates

LBBD: Tracking a cohort of households
For the 18 households in B&D who we could track, those with rent or council tax arrears over £250 fell
from 74% to 58%, their average benefits income increased by £115/month, and their average rent and
council tax arrears reduced by £1,216.
www.policyinpractice.co.uk/reimagine-debt

www.policyinpractice.co.uk/hardship-fund-allocations
● Local discretionary may not be able to plug the gap
● The ability of a council to do this using COVID-19 hardship funding will
depend on their local CTR scheme
Impact of CTR design - discretionary
support

Designing the right local scheme scheme for the future requires an understanding
of the wider context
Firstly, the drivers of scheme design, particularly with Covid-19 changes
● Will the emergency benefit changes be retained?
● What will happen to caseloads once the furlough scheme ends?
● Who are the new cohort, and how are they different?
● What is happening to poverty and ability to pay?
Secondly, the impact of scheme design
● Poverty, debt, arrears
● Collections
Data analysis can provide the required context
A final word on the context for CTR

202020
Over to Paul

The impact of Universal Credit in Wales
www.policyinpractice.co.uk/wales

Four key lessons learned
● A generous CTR scheme pays off
● Universal Credit has resulted in
council tax (and rent) arrears
● Awareness of CTR, and take-up,
are still too low
● The impact of Universal Credit on
CTR can be mitigated

A generous CTR scheme pays off
● Welsh Government funded 10%
budget cut in 2012-13
● CTR scheme covers all 22
authorities in Wales
● All awards based on 100% liability
● Collection rates and council tax
arrears have remained broadly
constant
● But emerging evidence of
increased council tax arrears under
Universal Credit.

Universal Credit has resulted in council
tax (and rent) arrears
● Council tax arrears more prevalent amongst households
in receipt of Universal Credit.
● Amongst those with arrears, Universal Credit is
associated with a higher level of council tax arrears
compared to legacy benefits.
● Most households that are not in council tax arrears
under legacy benefits remained with no arrears under
Universal Credit.
● Council tax arrears were more likely to increase under
Universal Credit than legacy benefits.
● Reasons: lower benefit amounts, five week wait and
monthly budgeting

Awareness and take up of CTR are still
too low
● Take-up of CTR estimated to be
around 60% in Wales
● Welsh Government mounting an
active campaign
● Our survey indicated that some
people thought CTR was part of
UC
● Others didn’t know whether they
were receiving CTR
● And some were not applying for
fear of overpayment recoveries

The impact of Universal Credit on CTR
can be mitigated
● Reduce taper rate
● Ignore changes in income below a
certain threshold (could roll-up)
● Don’t carry forward two-child limit
or Minimum Income Floor into CTR

272727
Poll: In the light of COVID-19 changes
in need are you reviewing your
scheme?

292929
Over to Sally Sanders, Enfield Council

How viable is your
council tax support
scheme
Policy in Practice Webinar
Sally Sanders
9th September 2020
www.enfield.gov.uk
Striving for excellence

Making sure the CTS Scheme
is right for Enfield and it’s residents
• Covid 19 has led to an increase in the CTS caseload and residents
claiming Universal Credit
– The amount of Council Tax Support given has increased, reducing the potential
Council Tax to be collected
– Envisage this will continue to change as those furloughed start to either return to
work, lose employment or take on lower paid jobs.
• Current CTS scheme very generous in the way it treats households
who work and receive UC
– Full CTS given regardless of whether working or not – minimum payment 24.5%
• Some Local Authorities have started to introduce banded schemes
– A change to the CTS scheme was needed to reduce rising costs and to make
the scheme fairer in it’s treatment of households who work and receive UC.
• Difficulties in considering a move to an earned income banded
scheme due to:
– Complexities in explaining these changes
– More people struggling financially as a result of COVID
– Explaining the driver to change - fairness and cost

A helping hand from
Policy in Practice
• The Driver behind the analysis work and CTS modelling we asked
Policy in Practice to do was to get an independent view about our
current scheme and proposed scheme change
• They
– Benchmarked our caseload and scheme against other LA schemes to highlight
differences for consideration
– Reported on how much CTS is awarded to those working on legacy benefits
compared to those working on UC, comparing those with similar levels of
earnings and household types to see what %age they should pay under UC for
fairness
– Compared the level of Council Tax arrears for these groups to see if a scheme
change for those working on UC would mean a potential for more Council Tax to
be paid
• Consideration was given to our time scales and changes needed
were quickly remodelled
– Always there to answer any questions that may arise to help with explanations

How have Policy in Practice helped
• Provided a deeper analysis of our data
• Useful data with graphs and highlights to help visualise and bring
messages to life to aid decision making
• Measured caseloads, costs and data against other LA’s highlighting
differences to other LA’s
• Providing analysis of our data and comparisons against other LA’s
that couldn’t be provided within the LA in the same way
• Confirmed that the current scheme was unfair and helped decide
what changes were needed in detail to get fairness which will also
reduce the increased cost of CTS as more households claim UC

A case study
The maximum working age CTS award in Enfield is 75.5% meaning
24.5% is the minimum payment
Proposed model looking at:
Bands
Maximum
CTS
Minimum
payment
Single
Weekly net earned
income
Couple
Weekly net earned
income
Family with 1
dependant
Weekly net earned
income
Family with 2 (or
more) dependants
Weekly net earned
income
1 75.5% 24.5% £0 £0 £0 £0
2 60% 40% £0.01 to £95.00 £0.01 to £135.00 £0.01 to £185.00 £0.01 to £235.00
3 45% 55% £95.01 to £145.00 £135.01 to £185.00 £185.01 to £235.00 £235.01 to £285.00
4 30% 70% £145.01 to £195.00 £185.01 to £235.00 £235.01 to £285.00 £285.01 to £335.00
5 15% 85% £195.01 and above £235.01 and above £285.01 and above £335.01 and above

A case study
Couple with 1 child on legacy benefits
Earned income £200.00/wk
CTS award 12.06/wk – Liability £29.99/wk
CTS award 40% of the liability, to pay 60% Council Tax
Couple with 1 child on UC (current scheme)
CTS award 22.64/wk – Liability £29.99/wk
CTS award 75.5% of the liability, to pay 24.5% Council Tax
Couple with 1 child on UC (proposed scheme)
CTS award £13.50/wk – Liability £29.99/wk (similar to non UC)
Proposed Earned Income band for a couple and 1 child £185.01/wk to £235/wk max
CTS award 45% of the liability, to pay 55% Council Tax

363636
Over to Ben

Modelling the future: two key questions
Key questions:
1. How many households will be claiming CTR when the Coronavirus Job
Retention Scheme (CJRS) ends in April 2021?
1. How will the cost of your CTR scheme change as a result of this new
caseload?

What we can model: caseload
We are modelling the number of households claiming CTR in 2021 based on:
● Number of households in current CTR cohort
● Estimated number of households leaving the CJRS in April 2021, based on:
○ Number of CJRS households in LA
○ Proportion of CJRS households expected to become unemployed after
the scheme ends*
○ Number of CJRS households already claiming CTR
*The default rate will be based on the latest OBR estimates but can be set by the
LA for their own modelling purposes

What we can model: cost
We are modelling the cost of CTR in 2021 based on:
● Actual CTR awards of the current CTR cohort
● Average awards for the projected 2021 cohort based on:
○ Average CTR awards for in work, unemployed and out of work
(carer/disabled/lone parent) households in current cohort
○ Projected number of in work, unemployed and out of work households in
2021 (using the demographic distribution of the new CTR cohort that
joined after April 2020)

Modelling CTR caseload and cost in
2021

Future proofing your CTR scheme
● Understand the national and local picture
● Understand the context
● Understand the impacts of your CTR scheme
● Data analysis can help

424242
Questions and answers

● For up to date information on the welfare support available see
www.policyinpractice.co.uk/your-income-and-coronavirus-covid-19/
● Follow up email with webinar recording and slides, with links
● Short survey to follow now
● Next webinars:
○ Wed 7 Oct: How to predict the demand for your customer-facing services
in April 2021
○ Wed 11 Nov: How to find the right debt solution for everyone
○ Wed 9 Dec: 2020: A policy review of the year, and look forward to 2021
Practical tools that can help
www.policyinpractice.co.uk/events

444444
Thank you
Zoe Charlesworth, Policy in Practice
Paul Howarth, Policy in Practice
Sally Sanders, Enfield Council
Ben Fell, Policy in Practice
hello@policyinpractice.co.uk
0330 088 9242

How viable is your council tax support scheme?

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