Issue - meetings

Council tax reduction scheme grant

Meeting: 17/12/2015 - Council (Item 23)

23 Council tax reduction scheme grant for town and parish councils pdf icon PDF 152 KB

(Cabinet member responsible: Mrs J Murphy)

 

Cabinet, at its meeting on 3 December 2015, considered a report on the council tax reduction scheme for town and parish councils.

 

The report of the Head of Finance, which Cabinet considered on 3 December, is attached.

 

Recommendations 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.

 

Minutes:

Council considered Cabinet’s recommendations, made at its meeting on 3 December 2015, on the council tax reduction scheme grant to towns and parishes for 2016/17.

 

Some councillors opposed Cabinet’s recommendations which, in their view, 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. Without this money parishes could struggle to fund additional duties and, if the government introduced a cap on council tax increases in town and parish council precepts for 2016/17, could risk a shortage of funds. The proposal to introduce a further grant funding stream was not necessary because the council already operated a generous scheme which was underspent. Council should reject the recommendations and request Cabinet to prepare a more detailed plan in 2016.

 

However, the majority of councillors supported the recommendations. The current scheme had not achieved its original intention to mitigate the impact of the council tax reduction scheme on town and parish councils with less than 28 per cent all town and parish councils using the grant as part of their budget setting process to issue a precept lower than might have been the case had they taken into account the amount of grant they received. The proposed grant scheme would simplify the process, offer a better way of distributing funds and target funding towards visible projects.  

 

 

RESOLVED: to

 

1.    bring forward a new scheme of distributing the grant for consideration during 2016;

 

2.    cease with immediate effect the current methodology for distributing the council tax reduction scheme; and

 

3.    make £152,000 available for the new grant scheme when Council sets its revenue budget for 2016/17.

 


Meeting: 03/12/2015 - Cabinet (Item 39)

39 Council tax reduction scheme grant pdf icon PDF 152 KB

To consider the head of finance’s report. 

Minutes:

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  ...  view the full minutes text for item 39


 

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