£650k cuts proposed for council tax support scheme in Luton

Luton Borough Council's executive committee discussed the proposal, which is part of the emergency budget approved on July 14.

The consultation period is scheduled for this autumn to enable any changes to be introduced next April, according to a report to the executive.

Labour High Town councillor Andy Malcolm said: “This is absolutely one of those things I referred to that it was with a sense of grief, when presenting the emergency budget.

“This is not something we wanted to do. We made some changes just last April.

“None of us were planning on looking at council tax support scheme again before coronavirus hit.

“And we had to look at an emergency budget to close the vast funding gap which opened up because of it.”

The cost of the scheme was £14.6m in 2019/20, of which about £5m was spent on council tax reduction support to elderly claimants, said the report.

“Statutory regulations mean the council is unable to make changes to the scheme affecting these residents.

"The remaining £9.8m was spent supporting working age households.

“This figure represents by far the single greatest area of discretionary spend within the local authority’s control.

“In light of growing pressure on the scheme and the wider budgetary pressure on the council, a need to make changes to ensure its sustainability is acknowledged.”

The Liberal Democrat opposition has described the proposal as “a cut which will mean 2,000 of the lowest income families will have to pay an average £220 more in council tax”.

This is on top of an even bigger increase aimed at the same vulnerable households last February, according to the Liberal Democrats.

Councillor Malcolm, who also serves as portfolio holder for finance, told the executive: “This is not something we want to be doing, but we’re having to look at making some changes to council tax reduction.

“The report is about going out to consult on what I would say is the least worst option in terms of making some savings in this area,” he added.

“We will be making changes to excess income range one where most of the payments sit, which is what we avoided doing the last time we did this.

“The proposed changes will deliver about a £650,000 reduction or saving. We’re balancing out some of the support a little.

“Households without children were paying 25 per cent of their council tax if they were in excess income range one.

“Those with children or those with a disability were only paying ten per cent.

“We’re going to ask all those households in income range one to pay 20 per cent of their council tax.

“Like the emergency budget, with a heavy heart I move that we go out to consultation on these changes to the council tax reduction scheme.”

A £650,000 reduction in expenditure on the scheme would enable members to allocate this funding towards the 2021 budget gap, added the report.

The executive agreed the consultation on a revised council tax reduction scheme can go ahead.