Consultation on Simpler and Faster Council Tax Support Scheme Set to Launch

Proposals to introduce a simpler, faster and easier to understand council tax support scheme for residents will be the subject of a public consultation set to be launched later this month.

The council tax support scheme helps residents on low incomes by reducing the amount of council tax they must pay.

Reading’s local scheme is now 13 years old and no longer fit for purpose. That’s because most working age, low income households have switched to universal credit as their main source of income in that period, which can result in fluctuating income levels and constantly changing council tax bills. The knock-on impact is the constant issuing of new and updated bills, making it difficult for residents to understand or plan their finances.

The Council is instead proposing a simplified new banded scheme based on household income which, if agreed, would take effect from April 2027.

As well as being easier to understand and administer, council tax reductions would be automatic where people are on universal credit, removing the need for residents to fill in forms to claim council tax support. Processing times would be quicker and far fewer revised bills would need to be posted, freeing up staff time to focus on supporting the most vulnerable residents. Changes to backdating rules are also expected to help reduce resident’s debt.

It is estimated the proposed switch to an automatic banding system will see most council tax support recipients receive the same level of council tax reduction, while a much smaller number and equal amount of residents will either be better off or worse off. Where residents are negatively impacted, they will be proactively contacted and invited to seek additional support to ensure they are maximising their income and offered debt advice. Access to additional financial support through the Council’s Crisis and Resilience Fund may also be considered where appropriate.

Just over 40% of local councils have already switched to income banded schemes, including in Berkshire at Wokingham, Bracknell Forest and Slough.

Councillor Ruth McEwan, Lead for Corporate Services and Resources, said:

“The proposed change to a much simpler, quicker and easier to understand council tax support scheme will remove the need for residents to spend time filling in forms if they are on universal credit, as the reduction would be automatically awarded. It also negates the need for the Council to regularly post out updated bills to residents as their income levels change, which is not only costly but is understandably confusing for residents and makes it difficult for them to plan their finances.

“Councils across the country are increasingly moving to a banded scheme based on household income and there are significant benefits to residents and the Council in making the switch.

“If agreed at Policy Committee, and when the consultation begins, we are keen to hear views from as many residents as possible, particularly people who benefit from the local council tax support scheme now, as their views will be taken into account before any final decisions are made on an updated scheme for next year.”

The proposals will be discussed at a meeting of the Council’s Policy Committee on Wednesday 16 September. https://democracy.reading.gov.uk/documents/s41059/Council%20Tax%20Support%20Scheme.pdf

If agreed, public consultation will begin the following day (17 Sep) and run until 19 November. That will include contacting a representative sample of council taxpayers, including those impacted by the proposed scheme changes. An online questionnaire will be available at https://reading.govocal.com/en-GB/projects from 17 September. A listening and engagement session is also planned with key stakeholders to discuss the proposal.