Decision Maker: Cabinet, Council
Decision status: For Determination
Is Key decision?: No
Is subject to call in?: No
Purpose: to agree distribution of grant to towns and parishes
Cabinet considered the head of finance’s report regarding the council tax reduction scheme grant to town and parish councils. The report proposed ceasing the grant in its current form and asking officers to bring forward options to allocate funds through a new grants scheme in 2016.
Councillor David Turner addressed the meeting, raising concerns that the recommendations would leave town and parish councils in a position where they had to set their precepts in December or January without knowing what grant they might receive from the district council. He asked Cabinet to reject the recommendations and to prepare a more detailed plan in 2016. However, if Cabinet was minded to approve the recommendations he asked that it also agreed to revisit its decision if the government introduced a cap on increases in town and parish council precepts for the 2016/17 financial year.
The Cabinet member for finance explained that the council tax reduction scheme took the form of a discount on the council tax bill and had the effect of reducing the council’s council tax base. If a council’s budget requirement remained the same, the amount of council tax charged would increase, or if council tax was not increased the income generated would reduce. This applied to county councils, district councils, and town and parish councils. To mitigate the impact of the reduced council tax base, each year the Government distributed, a non-ring-fenced grant via revenue support grant and the business rates retention scheme. The amount paid to district councils included an amount attributable to town or parish councils. For 2013/14, this amount had been specified by the government but since 2014/15, this funding was no longer been identifiable within revenue support grant.
In reviewing the scheme, Cabinet considered the following options:
1. to continue to distribute the grant applying the methodology used in previous financial years based upon town and parish councils’ relative need following the reduction in their respective tax bases
2. to not distribute any grant at all
3. to move from option 1 to option 2 over a fixed time period
4. to cease the current scheme and introduce a new scheme in 2016
The Cabinet member considered that the current scheme was not operating correctly as not all town and parish councils used the grant to reduce their precepts. Cabinet agreed and thereby rejected option 1. Option 2 and 3 were rejected as these would penalise those local councils that had used the grant for its correct purpose: to reduce the council tax base. Cabinet considered that a better grants scheme was needed (option 4) and asked the officers to bring back options to Cabinet in 2016. It was hoped that parish councils would find themselves in a stronger position from these changes.
RECOMMENDED: to Council to
(a) bring forward a new scheme of distributing the grant for consideration during 2016;
(b) cease with immediate effect the current methodology for distributing the council tax reduction scheme; and
(c) make £152,000 available for the new grant scheme when Council sets its revenue budget for 2016/17.
Report author: Paul Howden
Publication date: 10/12/2015
Date of decision: 03/12/2015
Decided at meeting: 03/12/2015 - Cabinet