Council Tax Reduction (Scotland) Amendment Regulations 2014 (SSI 2014/35)
The next item is consideration of the Council Tax Reduction (Scotland) Amendment Regulations 2014 (SSI 2014/35). The instrument was considered by the Delegated Powers and Law Reform Committee at its meeting on 4 March, and that committee did not draw the attention of the Parliament to the regulations on any grounds within its remit.
In considering the regulations, we are joined by Jenny Brough, who is team leader in the local government finance and local taxation unit at the Scottish Government. Do members have any questions on the regulations?
The regulations do not seem to say what measurement has been used to uprate the figures. Was the rate of inflation used?
The regulations uprate various components in the council tax reduction scheme, including the amounts for deemed living expenses and premium and non-dependant deductions, which are the amounts by which a contribution is deemed to be made to council tax if there are others in the dwelling who are not dependants. It is informed by the schedule of benefit rates for 2014-15, which was published by the UK Government in December. The schedule sets out those components, which are used to uprate the figures in the council tax reduction scheme, so it reflects the UK Government’s benefits uprating but applies those figures to the scheme.
The principle, I take it, is to keep in line with the same uprating as applies south of the border and across the UK.
When housing benefit and council tax benefit were jointly administered, the benefits uprating was applied. Now that there is the council tax reduction scheme, those who are in receipt of benefits will have those benefits uprated every year by the UK Government. If we were not to similarly uprate the components in the CTR scheme, that would mean that someone whose benefits income was being assessed would be deemed to have more income, but their living expenses—the amount that they needed to live on—for council tax reduction purposes would not be increased, so they could get a lower council tax reduction because they would be deemed to have more income, even though that may just be because their benefits were uprated.
Do you happen to know whether the UK Government uses the consumer prices index or the retail prices index as its benefits uprater?
I do not have my schedule with me, but I can certainly follow up that point on the detail of the UK Government’s approach for 2014-15, if that would be helpful.
As a matter of interest, in relation to uprating, does the Scottish Government have a policy on using the CPI or the RPI as its measurement of the level of price inflation?
I will clarify the exact UK Government measurements for its components. In terms of what has been applied to the regulations, where we have taken those components from the UK schedule we have transposed them, but for non-dependant deductions we have modelled the figures on the corresponding increases in housing benefit, and there is now no direct comparator to the former council tax benefit deduction in the social security system. However, I can write to you to outline the UK Government’s approach if that would help.
The question is more about whether there are other benefits that the Scottish Government uprates and, if so, which measurement of inflation it uses. I want to know whether it has a consistent policy or whether the policy varies.
I am not aware of another comparator to council tax reduction, as we have had that only for the current year. There is no comparator that comes to mind.
My question may already have been covered, but I would like to clarify something, because I got a bit lost there. Could you confirm that if the regulations do not come into force, the effect would be to financially disadvantage people who require help with their council tax?
If the uprating were not applied, it would affect the calculation of council tax reduction for those in receipt of income from a social security benefit, which will be uprated under the UK Government schedule, because they will have more income next year from that social security benefit. When that is considered for council tax reduction, there would not be a corresponding increase in their deemed living expenses, so they could effectively be penalised for having more income and could therefore receive a lower council tax reduction award than if an uprating were applied in adjusting their higher rate of income from benefits.
Thank you. It is crucial for some of the worst-off in our society that the uprating is applied.
Ms Brough has clarified that, if we did not amend the principal regulations, we would be giving people money with one hand and taking it away with the other. Linda Fabiani made that point as well. However, I note that three members of the Delegated Powers and Law Reform Committee did not want the regulations to go ahead. I do not know the reason for that, but I certainly hope that we do not agree with that position.
You do not need to worry, convener. I am not going to vote against the regulations or create any trouble. However, I am concerned that a division took place in the Delegated Powers and Law Reform Committee when it considered whether the regulations are intra vires. The fact that a division took place comes as a bit of a surprise. Do the concerns that were raised in that committee have any long-term consequences for these or any subsequent regulations?
Before the Delegated Powers and Law Reform Committee considered the regulations, it wrote to ask the Scottish Government to explain why the regulations do not relate to any matters that are reserved under the Scotland Act 1998, and specifically social security assistance. The Scottish Government’s response, as it was when it was asked about other council tax reduction scheme regulations, was that the regulations reduce council tax liability, which is a matter that is within the Scottish Government’s competence. The regulations do not make provision for a payment or a subsidy to meet liability.
The Scottish Government’s firm view is that the regulations are within competence. The Delegated Powers and Law Reform Committee also asked us that question in relation to other council tax reduction scheme regulations, and the answer has always been that they relate to reductions of liability.
Is this an area that we should be concerned about? Should we look at it further to try to eliminate any future discussions?
All that I can say is that, as has been stated, the Scottish Government’s firm view is that regulations relating to reductions of council tax liability are within competence.
I have a further question for clarification, in case colleagues were confused about my line of questioning. It would be odd if the Scottish Government did not uprate the benefits, but my understanding is that the UK Government has moved from using a higher measure of inflation—the retail prices index—to using a lower measure, namely the consumer prices index. It is within the Scottish Government’s competence to use the higher measure if it wishes to do so.
We are uprating the benefits to keep them in line with the UK because of the benefits of having one system across the UK—I believe that that is the Government’s logic in this situation—but am I right to say that the Scottish Government could have used the traditional method and had a more generous uprating?
Part of the decision underpinning the approach to the regulations is the policy commitment of the Scottish Government and COSLA to protect the entitlement that would have existed under council tax benefit. That is the reason for the approach that has been taken in aligning with the UK Government’s uprating, as it is reasonable to assume that it would have applied to council tax benefit had it continued. That is the rationale behind the decision.
But a more generous uprating would have protected entitlement too, would it not?
In terms of using different rates, or higher rates?
A more generous uprating would also have protected entitlement.
It would have—actually, I am afraid that I cannot say for definite what the impact of using higher rates would have been, as that is not something that we considered for this year’s policy.
Convener, on a point of clarification, people keep calling council tax reduction a “benefit”. I wish that the benefits system was under the control of this Parliament, but this is a reduction and not a benefit. That is probably why the Delegated Powers and Law Reform Committee got itself tied into knots. We have to get it right. This is not a benefit. It is a reduction scheme that was put in place to mitigate the slashing of a benefit.
Thank you for that clarification.
I was going to make that point as well. I think that I made it way back when we first considered the regulations. This is clearly not a benefit; if it were, it would be ultra vires.
The bare bones of the matter, as I understand it from what Jenny Brough has said about how council tax reduction is calculated, are that one side of the equation has been uprated in line with whatever measure has been used, and if we fail to uprate the other side of the equation—presumably in line with the same measure, as we have apples and apples as opposed to apples and pears—a negative impact would be felt by some of the poorest members of our society, as Linda Fabiani said. That is certainly not something that I wish to see.
The result of the division in the Delegated Powers and Law Reform Committee was four for, three against and no abstentions. Who voted against?
The information is in the public domain, so we should know.
Yes. Those who voted against were Richard Baker, North East Scotland; Margaret McCulloch, Central Scotland; and John Scott, Ayr.
So, Labour and the Tories voted against. Anyway, that is what happened in the Delegated Powers and Law Reform Committee. Given the explanations that we have always been privy to in this committee, I do not recall that we have asked for any opinion about vires.
I assume that, given that the issue was devolved to us, we have to deal with it. We had to bring in the legislation. There may have been some other technical issue, but I am not aware of any such discussions. I cannot help any more than Jenny Brough can in clarifying why that division occurred.
We have exhausted the issue. At least we had some questions for Jenny this time; the last time she was here, we did not manage to get one question in.
Do members agree to note the regulations?
Members indicated agreement.
Thank you for coming in, Jenny. If you can pass on any information or any clarifications based on the questions that we have asked, that would be helpful.
As agreed at the start of the meeting, we will now move into private session.
12:26 Meeting continued in private until 12:30.Previous
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