Social Security Committee

Meeting date: Thursday, October 6, 2016

Official Report 468KB pdf

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Subordinate Legislation

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Council Tax Reduction (Scotland) Amendment (No 2) Regulations 2016 (SSI 2016/25)

I resume the meeting and remind members that we are in public session. The next item is subordinate legislation. We will take evidence from Scottish Government officials on the Council Tax Reduction (Scotland) Amendment (No 2) Regulations 2016. I welcome Robin Haynes, the head of council tax, and Dave Sorenson, a statistician. I look forward to hearing your evidence. The regulations were considered by the Delegated Powers and Law Reform Committee at its meeting on 13 September and it agreed to draw the regulations to the attention of the Parliament on the ground that they may raise a devolution issue—that is one of the grounds against which the committee considers all instruments.

We will go straight to questions, if that is all right. I will ask the first question. Under the heading “Financial Effects”, the policy note states:

“It is estimated that the maximum additional Council Tax income foregone by local authorities as a result of these Regulations will be £18 m for the increase in child premium and £7 million for the Band E to H exemption.”

Will there be any cost implications for local authorities or will the Scottish Government mitigate the costs?

Thank you for your kind words of introduction, convener.

The numbers that you quote appeared on a policy note that was submitted in error by somebody in my team. I apologise to the committee for the fact that a withdrawn policy note has caused confusion. It was an early draft that was presented in error, for which I apologise.

There are some revised numbers, and I will explain how they were reached. The numbers on the withdrawn policy note featured in material that was placed in the Scottish Parliament information centre on 2 March, when the First Minister in the previous Administration made an announcement about the then Government’s council tax policies. As members will be aware, those policies were repeated in the SNP manifesto and, after the May election, it was our job as civil servants to work out how to give life to those policy intentions.

After the May election, Dave Sorensen and I, along with other colleagues, had a further look at them. Perhaps Dave can give more detail, if necessary. The revised numbers are £8 million for the increase in child premium and £6 million for the relief scheme for low-income households in properties in bands E to H.

The difference between the two sets of numbers arises from two factors, the first of which is methodological. The first iteration of the calculations was arrived at by Mr Sorensen and other colleagues using information on some sample households that was drawn from the family resources survey and was aggregated up. The second set of numbers was derived from a data set that the Scottish Government receives from all local authorities that gives detail on every council tax reduction application. The second data set is clearly more comprehensive.

The second factor is that, after the May election, we engaged with the practitioner community to take practitioners’ advice about how to enact and give life to the policy intention of the elected Government. Some of those discussions were informal, but some of them were very formal. The Convention of Scottish Local Authorities and the Scottish Government have something called the settlement and distribution group, which addresses the local government finance settlement and its distribution among the 32 local authorities. A sub-group of that was formed and was given the task of looking at the regulations that the committee is considering today. It comprised ourselves and other colleagues from the Scottish Government, officials from COSLA and, most important, a number of local authority directors of finance and a number of local authority head of revenue and benefits practitioners, whose day job involves their being all over the administration of council tax and the council tax reduction scheme.

Over the course of a number of meetings of the sub-group, the estimates of the amount of council tax revenue that would be forgone as a consequence of the regulations was considered in great detail, and the figures were arrived at as a consequence of those discussions. Indeed, the sub-group of the settlement and distribution group endorsed those numbers, so they were reached with the benefit of significant input from practitioners in the local government finance community.

Thank you. Do you want to come in, Mr Sorensen?

I can speak about the methodology in as much detail you wish.

I reiterate what Mr Haynes said. The current estimate, as approved and endorsed by the local authority community, is that the increase in the family premium will result in £8 million more per year of CTR cost, or income forgone by local authorities, and it has now been agreed, through the same process, that the bands E to H relief scheme will cost £6 million per year.

Thank you for that explanation. It is always a good idea to get clarification of such issues.

I return to my original question: will there be no cost implications for councils? Is the cost of the measures in the regulations covered completely?

That is a good question. The amounts of money that we have been talking about can be described in two ways. They are the amount of council tax reduction that is awarded to applicants, but the reverse of that coin is that they are council tax revenues forgone.

The figures that I mentioned have now been endorsed, albeit that they have not been recognised by the settlement and distribution group itself, because it was nervous about endorsing something that local government was not entirely in agreement with at that stage. Nevertheless, those numbers are agreed as fact. I think that Mr Mackay made it clear in the evidence that he gave to the Local Government and Communities Committee yesterday that he expects those numbers and other things relating to the implementation of the reforms to be part of his wider discussion with local government on the budget settlement going forward.

As members have no further questions, is the committee content to note the instrument?

Members indicated agreement.

I thank the witnesses for their evidence. You can leave now.

Meeting closed at 11:09.