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Response from CAS to the Committees Letter on Council Tax Reduction (Scotland) Regulations 2021

Correspondence from Citizens Advice Scotland (CAS), 9 September 2021

Dear Convener, 

Thank you for your recent letter regarding the Council Tax Regulations 2021 which are due to be considered by the Committee on 23 September and are grateful for the opportunity to provide our insight. Our response to the questions asked is as follows:

Have you been consulted by Scottish Government officials on these regulations? If so, do you have any comment on that engagement?

In June, we were informed that these regulations were to be laid and these had been flagged to us prior to that. 

Do you consider that the regulations meet the policy intent, set out in the policy note that: “as far as practicable, a household in the same circumstances receives the same level of Council Tax Reduction whether it is on Universal Credit or not.”

Overall, we consider that the regulations meet the policy as set out in the attached note, particularly that they are “as fair as practicable, a household in the same circumstances receives the same level of Council Tax Reduction whether it is on Universal Credit or not.”

Based on the new regulations and modelling, these proposals are a positive step forward and will even the playing field by re-introducing the lone parent disregard and recognising that Housing Element of Universal Credit was not being disregarded whereas legacy Housing Benefit was.

The new rules aim to provide equity ‘as far as practicable’ but will not do so in every single circumstance.  (See Scottish Government background paper sections 3.5 and 4).  Have you identified situations where the new regulations will not provide the same level of CTR on Universal Credit as on legacy benefits and does this give you any concerns?

To date, we have not identified any situations where the new regulations will not provide the same level of CTR on Universal Credit as on legal benefits. 

That being said, as identified in the modelling paper, there is a possibility that some households may be affected. However, to be absolutely certain would mean we would have to conduct our own modelling to work out if our general clientele visiting our bureaux would be amongst those affected.

Nonetheless, on the face of it, our usual clientele should not be affected as most will likely benefit from the new regulations given that most tended to be lone parents on low incomes. However, we should highlight that during COVID, our clientele demographics have changed to reflect those impacted by the pandemic such as younger people aged under 35 and owner occupiers.  This could mean there is potential for future CABx clients being affected by these changes. Based on the modelling paper, this has already been considered and we accept that it is difficult to predict for certain what will happen once certain measures such as furlough and the Universal Credit £20 uplift officially ends. 

Again, we wish to iterate that these regulations are certainly a good step forward for Universal Credit Claimants. 

Do you have any suggestions that would further reduce the occurrence of different levels of CTR support for those on Universal Credit compared to legacy benefits?

Our only suggestion would be encouragement of local authorities to automatically apply Council Tax Reduction upon notification of a Universal Credit Application. Currently some councils have already implemented such automatic application, whilst others have opted for other processes such as sending a letter to encourage Universal Credit applicants to apply for CTR or to wait until the Universal Credit award has been paid. 

Given the new revised scheme, councils should be able to work out a person’s claim for CTR upon notification of a Universal Credit application as only certain elements such as child elements will be applicable. 

Prior to the revised scheme, some councils were reluctant to do this as the whole Universal Credit Award had to be applied and there was no disregard for Housing Element. This meant that in order to avoid an overpayment, councils had to wait for the Universal Credit to be awarded as this would allow them to calculate the CTR applicable. 

Under the revised CTR scheme, councils should be able to apply CTR at an earlier stage as the information pertaining to household composition should be accessible from the Universal Credit notification stage and thus meaning they no longer need to wait for the Universal Credit to be awarded which can take several months in some instances. 

Do you have any concerns about the changes to local authority systems that will be required as a result of the new rules in these regulations?

At present, this is difficult to say for certain as there may be an initial cost for local authorities in getting the new regulations implemented in their systems and processes, such as changes to CTR award notification letters, training staff and updating software. However, given that this is likely to increase the amount of revenue in terms of council tax and CTR, local authorities may be able to absorb these costs. 

As to the question on providing oral evidence if needed, on this occasion we will not put ourselves forward. This written response covers our supportive position on this matter.  

Thank you again for the opportunity to respond to these regulations.  

Your sincerely,

Myles Fitt

Strategic Lead for Financial Health, Citizens Advice Scotland