Welfare Reform Committee

Meeting date: Tuesday, September 10, 2013

Official Report 487KB pdf

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Subordinate Legislation

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Council Tax Reduction (Scotland) (No 2) Regulations 2013 (SSI 2013/218)

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Council Tax Reduction (Scotland) (No 3) Regulations 2013 (SSI 2013/239)

Our next agenda item is consideration of Scottish statutory instruments. The two sets of regulations were considered by the Delegated Powers and Law Reform Committee at its meeting on 3 September, That committee agreed to draw SSI 2013/218 to the Parliament’s attention on reporting ground (i)—that its drafting appears to be defective. The committee’s report explains that the regulations provide that the Council Tax Reduction (Scotland) Regulations 2012 are amended in accordance with regulations 10 to 16, whereas the intention was to amend the Council Tax Reduction (State Pension Credit) (Scotland) Regulations 2012.

The Scottish Government has acknowledged the error, and it laid SSI 2013/239 on 9 August to correct it in time for the coming into force of the regulations on 1 October 2013.

I draw to the committee’s attention a submission received from the Child Poverty Action Group on the regulations.

In considering the two sets of regulations, we are joined by officials from the Scottish Government. I welcome Colin Brown, senior principal legal officer in the directorate for legal services, and Jenny Brough, the team leader of the council tax unit. Do members wish to put any questions or comments to the officials?

I hesitate to jump in first, as the new committee member—

It is all right—I decide who comes in first. Carry on.

I thank the officials for coming along.

With reference to valuation appeal committees, the policy note says:

“It became clear in February 2013 that VACs were not willing to hear such appeals.”

Basically, it became clear in February that the system that the Scottish Government had planned was not going to work at all. Is that right? I ask the officials to remind me of what happened.

In February this year, by law, the original route of appeal for council tax reduction would have been to the valuation appeal committees. It became clear in February that the VACs would not be able to hear council tax reduction appeals. Mr Swinney wrote to the committee at that point, bringing the committee up to speed on the situation and informing the committee and Parliament that he had commissioned Jim McCafferty, the immediate past president of the Institute of Revenues Rating and Valuation, to consider an alternative mechanism for council tax reduction appeals.

I do not wish to go over old ground too much, but was there not correspondence in 2012 implying that the VACs were not going to be able to cope? I am surprised that the matter arose as late as February 2013. Was there not correspondence in 2012 from the VACs themselves?

I do not have correspondence from 2012 in front of me. The Scottish Government was in discussion with the valuation appeal committees throughout 2012 about the arrangements that would apply under the council tax reduction scheme. It became very clear in February this year that those arrangements were definitely not going to happen. I can certainly follow up and look into previous correspondence from 2012 if that would be helpful.

Yes, I think that it would be helpful to know why the situation arose so late and why there was a last-minute change of plan.

In the meantime, the council tax reduction scheme is in place, but there is no method of appeal. What has been happening? Is a temporary system in place? Who has been hearing the appeals? Have there been any appeals?

From the commencement of the council tax reduction scheme on 1 April this year, the first stage of review for someone who wishes to contest their council tax reduction is exactly the same as it was under the previous council tax benefit system, which was to ask the local authority to reconsider its decision. Therefore, someone would ask the local authority for a review. Under the old council tax benefit arrangements, only after that stage would they go to an appeal.

The Scottish Government expects that, when it is established, the review process for council tax reduction will consider cases that have gone beyond the local authority stage, in the same timescales as Her Majesty’s Courts and Tribunals Service considered the old council tax benefit cases. The first stage is for an applicant to ask their local authority for a review.

So no temporary system is in place; a backlog will build up until October, when cases will be dealt with. Is that right?

We have been monitoring the emerging number of cases. We are aware of about 20 to 30 cases since April that are likely to be the subject of an appeal.

If we assume that we will approve the regulations, will there be any difficulty in cases in the backlog meeting deadlines for applications and so on? The regulations contain timescales for applying. Will all cases qualify for the right of appeal to the new panel?

Yes. The regulations provide for any appeal that is outstanding when the regulations come into force to progress under the new system. Appeals will continue, but they will go to the newly established appeal mechanism.

If a case was successful but had a six-month delay, would the effect of the decision go back to when the original application was submitted?

Yes, if that was appropriate in the circumstances of the case.

If a decision was made to uphold an appeal and that was assumed to benefit the applicant, would the decision be backdated?

It would go back to the original application date. I was simply covering the possibility that changes in circumstances might affect the impact of an appeal.

The delays could cause expense for people who, if they are successful, should not necessarily have incurred such expenditure.

Convener, I do not know whether to ask about CPAG’s submission, which raises a number of questions.

I will give other people an opportunity to ask questions and come back to you.

I congratulate Ken Macintosh on spotting what the committee was up to previously. The previous regulations met with our approval in most ways, but they had the flaw of not having a proper appeals procedure. At the time, we got an undertaking that adjustments would be proposed to include a proper appeals procedure, which would happen in a timescale that in no way delayed the appeal process. I take it that the regulations that we are discussing today and the timescale in which they will come into force will fulfil our previous request by allowing appeals to proceed in a normal and timely manner.

When Robin Haynes and I appeared before the committee in March, we said that we expected the process to consider council tax reduction cases in the same timescales as applied under the old council tax benefit arrangements. We still believe that.

You mentioned that you have become aware of 20 to 30 cases in the intervening time. Will you reassure us that those cases would not have proceeded more quickly if the new process had been in place earlier and that the people involved will be able to take advantage of that process when it is available?

I cannot say precisely how quickly or otherwise cases would have proceeded under the council tax benefit arrangements, but we are clear that the timescales are broadly similar. The cases will proceed under the new review arrangements that we are putting in place.

Alex Johnstone has covered a fair bit of what I was going to ask about. The committee previously scrutinised the delay factor and ascertained that no real delays would occur—if we approve the regulations, of course.

I have a more general point on the guidance that will be issued and, in particular, the concerns that have been raised, including by CPAG, about representatives for appellants and appellants’ rights. Obviously, some people will require help with appeals. What is the Government’s viewpoint on allowing appellants to have representatives and on reviewing some of the documentation?

11:15

It is unfortunate that Robin Haynes is not able to be in front of the committee today, as he has led for the Scottish Government on that work and on the guidance. I can say that we are working with CPAG and others in the welfare rights sector on the development of the guidance and with local authorities to ensure that we meet everybody’s needs in that process. However, I am afraid that I would have to ask Robin Haynes and colleagues to follow up in writing to the committee on the specific details of the content of the guidance, which is in preparation.

We would be happy to receive a letter to clarify things.

That would be useful, but can we be assured that CPAG and other bodies are being consulted on the guidance?

Yes. We very much welcome the support that we have had from CPAG.

Can Ms Brough or Mr Brown tell us what the effect would be on people on the ground if the regulations—but particularly SSI 2013/218—were not to come into force?

Quite simply, there would not be a mechanism for reviewing council tax reduction decisions if the regulations did not come into force. That is the process that they are intended to create.

So people would have no recourse. They would have no mechanism at all for appeal.

They would have recourse to a valuation appeal committee, as that is what is currently provided for.

The purpose of the regulations is, effectively, to close off that route now that valuation appeal committees have made it clear that they will not hear council tax reduction appeals.

CPAG highlighted a number of issues, one of which was about flexibility in relation to time limits for appeals. Did you consider that issue?

Yes. CPAG raised a lack of flexibility in the time limits in the regulations. Its submission notes:

“the time limits are not the same as those that apply to housing benefit (HB) appeals.”

The council tax reduction scheme necessarily operates very differently, so various elements of the scheme will not be the same as those that would apply in relation to housing benefit. That is one point in relation to which we have had to say that the CTR scheme is necessarily not the same.

On the general point about time limits, we have noted CPAG’s comments, but at this stage, we want to see how the arrangements work in practice once the system is up and running.

I would like to explore that. The CTR system will be different from the housing benefit system, but am I right in thinking that the panel—or certainly the judge—might be the same in each case?

I am not aware of the answer to that question, but we could certainly follow up that point.

There would be a separate appeal mechanism under separate regulations. Housing benefit is run by the Department for Work and Pensions, and we are talking about part of the council tax system. The processes are necessarily separate.

CPAG made that point in its submission to us. I do not know whether you have access to that document. Is it a private committee paper?

We have it.

Paragraph 4.3 refers to onward appeals. CPAG says:

“As Mr McCafferty pointed out”—

Mr McCafferty conducted the review for the Government—

“the lack of an onward appeal will be a particularly difficult situation if the review panel is constituted of the same judge who is hearing an identically worded”

housing benefit

“appeal.”

I take it from that that the judge, or the panel, could be the same. Am I wrong in jumping to that conclusion?

I have not looked at that in detail, so we will come back to you on that point. We reinforce the point that, procedurally, the appeals would necessarily be separate processes under separate legislation, but we can look at that point from CPAG.

Procedurally, there are clearly two different sets of legislation—I understand that. However, my understanding is that an applicant will possibly have appeals relating to housing benefit and council tax reduction at the same time, using identical language and for very similar, if not identical, reasons. In fact, that was a virtue of the system that Mr McCafferty recommended—that the appeals be conducted in that manner. Am I wrong in making that assumption?

No, there will certainly be similarities, in particular given that the council tax reduction scheme was based on the principles of council tax benefit, where possible. However, we do not want to draw too close a parallel between the two because they come under separate jurisdictions going forward.

That is clear—I understand that.

I go back to my original question. You have ruled out introducing some flexibility. CPAG suggests that you could perhaps bring forward an amending regulation to introduce some flexibility so that somebody who fell outwith the timescale could seek a review. If they miss their deadline because they are in hospital—or for whatever other reason—the process could allow for some flexibility, as there is with housing benefit reviews. Have you ruled out such flexibility?

As they stand, these are regulations for the new scheme. However, we can look at that point as they are implemented.

The CPAG submission mentions the example of when

“a party has unavoidably been unable to attend a hearing and give evidence”.

In the case of housing benefit, in such an instance there would be an onward appeal to the same judge or panel. In other words, in the case of housing benefit, if an appeal does not make the deadline, it can be carried over to the same panel. However, that is not the case with council tax reduction.

That is correct, as the regulations stand.

Did you consider that point and rule it out, or was it not considered? It is not in the regulations now. Did you consider it?

The time limits were considered when we were drafting the regulations—

—but ruled out.

The view was to go with strict—albeit quite lengthy—time limits at present.

Is there no right of onward appeal?

There is a technical reason for that being ruled out: the powers do not allow for the creation of an appeal system. Appeals in relation to council tax go to valuation appeal committees—that is the appeal system. The wording of the regulations is a technicality; the wording is all about review, so it would be difficult to create a further appeal tier because there is no power to create an appeal mechanism. To an extent, that is semantics, but it is a constraint on the creation of the system.

There is also a policy element, of course, as to how far you wish—

Could you call it onward review, then, rather than onward appeal?

The remedy would be judicial review by a court.

That would be hugely expensive and unlikely to happen.

The CPAG submission raised another point. A local authority that changes its initial decision does not seem to be able to do so without the applicant submitting a fresh application. In other words, if an applicant appeals and the local authority decides that it will change its decision, the applicant will have to submit a fresh application—the authority cannot just set aside its decision. Is that the case?

I think that that is probably not the case. It is quite difficult to be definitive because the regulations leave it to the review panel to determine its mechanisms for managing appeals. Clearly, once an appeal is put to that panel, the conduct of that review becomes a matter for the panel and it will have its own operating rules as to how it proceeds.

In a scenario in which the council is minded to concede the appeal, technically I think that it then needs the panel to agree to that. However, I imagine that the panel would not wish to waste its time doing appeals when consensus has broken out.

Convener, would it be possible to send the CPAG submission to the Government for comment?

You could write to the Government with specific questions, but I think that many of them relate to the regulations that were brought in previously, not the regulations that are under discussion. You will have seek clarity yourself because we covered some of these issues in our previous discussions on the regulations. The reason why you are not getting direct answers to your questions this morning is because your questions do not relate specifically to the regulations that are before us.

I am not sure about that—

It might be worth exploring the issue. I understand why you want to do so—after all, you have a submission from CPAG that is asking questions about the matter—but the fact is that we covered a lot of these issues in previous discussions and identified certain problems, which were addressed. If you want to pursue specific questions yourself, you are at liberty to do so. In fact, it might be fairer to do that than to put them to the officials who are here this morning to talk about the regulations that are before us rather than issues that are covered in another set of regulations.

I could be wrong, convener, but I am pretty sure that the CPAG document refers to the regulations that are before us today, not to old regulations.

I am sure that it does—

I am asking questions as a new member.

It is not that these are new regulations. Some of the issues that you are raising are pertinent to the previous regulations; these regulations relate specifically to an amendment to something that needed to be clarified. I am not saying that the officials before us do not know their information, but the point is that your questions are not relevant to these specific regulations. I am looking to the officials for confirmation whether that is the case. I do not know why they would mislead anyone here, but I do not think that it is worth pursuing a line of questioning on an issue that is not relevant to these regulations.

Some of the questions cover elements that go beyond legislation and which will be set out in the procedural guidance, which is still being developed. If anyone has questions about those procedures, we would be very happy to take them in writing.

My final question was actually going to be whether the procedural guidance will come before the committee.

It will all come before the committee.

As a new member, I am not sure what previous discussions have taken place but, from my reading of it, this very helpful CPAG document is not about any regulations other than those that are before us today. It is about items that are either in or not in the regulations or which might have been considered—or indeed which were not considered—and which have not been included. This is very much about the policy behind the regulations.

Having read the CPAG document, I know that it is relevant to this matter but from what the officials have said it seems that some of your questions in relation to it cannot be answered at the moment for a variety of reasons. It might be worth investigating them through some other route, because I do not know whether we are making any headway with this line of questioning.

All I was going to suggest was that we send the CPAG document, which makes five particular points, to the Government for comment.

I am happy to do that if it helps to get the clarification that you are looking for; indeed, the committee would find it useful to hear whatever points the Government might wish to make. I just do not think that we are going to get those comments by pursuing this line of questioning at the moment.

Thanks, convener.

Perhaps I can help Mr Macintosh by suggesting that, as a new member of the committee, he seek advice from the clerks on our previous lines of questioning on this issue—

I am sure that he will take that suggestion on board.

Beyond that, the clerks could give him an idea of the workings of the local government system, which is the first aspect.

I am sure that Mr Macintosh will go away and do his homework, Mr Stewart, now that you have told him to do so.

Annabelle Ewing has a question.

I will be very brief, because some of the points that I wanted to raise were dealt with in the discussion that we have just had—I was going to say, “the discussion that we had over the past few minutes”, but it lasted slightly longer than that.

As the convener has said, we have looked at and reached a view on a number of these issues. When I read CPAG’s paper this morning, I felt that it was going back over older ground to an extent. Of course, that is entirely up to CPAG, but that might well have led to Ken Macintosh’s line of questioning, which went slightly beyond the regulations that the officials are here to speak to. Having read the regulations, I feel that the time limits of two months and 42 days respectively are quite generous and, from my recollection of various kinds of review procedures, totally in keeping with what we would expect.

I very much welcome the fact that we will hear more about the guidance, because that will be crucial. Indeed, CPAG has made very important points about representation and so forth.

Finally, having listened to the discussion, I think that we must accept that two separate jurisdictions are involved and that different things always flow from different jurisdictions. I think that it is important to bear that in mind in terms of how the regulations are presented. It does not do anybody any service to do work that inadvertently muddles up two procedures, because they are very different.

11:30

I think that the officials tried to make that point.

If there are no other questions, does the committee agree just to note the regulations?

Members indicated agreement.

I thank the officials very much for coming in front of us this morning. We will write to them with questions to get clarification on some issues.