Agenda item

The Financial Services Manager presented the report for consideration of the withdrawal of grant funding to Town and Parish Councils for the Localisation of Council Tax Support Scheme (LCTS) from 2017/18 onwards.

The report had been prepared taking into account the significant financial challenges faced by the Council over its Medium Term Financial Strategy and the removal of Revenue Support Grant by 2019/20.  The Council’s savings target was in excess of £2m.

The Welfare Reform Act 2012 abolished the nationally funded Council Tax Benefit Scheme and replaced it with the (LCTS) from April 2013. This new scheme was funded by the DCLG through a cash limited grant, but at 90% of the previous council tax benefit scheme.

The LCTS scheme took the form of a discount on the council tax bill rather than the previous council tax benefit payment onto claimants’ council tax accounts. The impact of these discounts on the tax base was to reduce it.

West Lindsey District Council received a total grant of £519,000 of which £169,811.82 was provided as grant to the Town and Parish Councils to reduce the impact of the reduction in their tax base.

Since that time the Revenue Support Grant which included an element for this support, had reduced by 81%, however WLDC have continued to issue grants at the original level.  It was now considered that this position was unsustainable.

West Lindsey District Council, unlike many other local authorities had maintained the original LCTS grant level as at 2013/14, and therefore the Town and Parish Councils had benefitted from additional support over the past three years.

As the Council’s revenue budget continued to come under pressure from continuous reductions in Central Government funding, the level of support that was provided to the Town and Parish Councils also needed to be reviewed.

Given these reductions it was proposed that the funding to Town and Parish Councils be withdrawn from 2017/18 onwards.

Members debated the report at some length and asked further questions such as the actual cost per Parish Council.  This was confirmed as varying amounts depending upon the size of the Parish and the number of properties, with Gainsborough being the largest, at a cost of £69,000.

The Financial Services Manager informed the Committee that some authorities had withdrawn the funding three years previously, however some Members felt that whilst the total cost was relatively small to West Lindsey District Council, the withdrawal would have a major impact on Town and Parish Councils.  Parish Councils managed their funds wisely and their Councillors were volunteers.  Suggestions were made that the withdrawal be phased or that it continue to be funded by WLDC.  It was pointed out that some Members had conflicting interests and that in the context of the meeting, Members were representing the interest of the District Council, and that all public bodies were having to make cuts.

Councillor Shore proposed that the withdrawal of the funding be phased over a period of three years, this was seconded by Councillor Boles.

On being voted upon the MOTION WAS LOST.

It was agreed that if the proposal had been resolved, other cuts would have to be made elsewhere.  WLDC already had to find a £2m saving, and this funding withdrawal would help to share the burden.

The recommendations as set out in the report were then moved, seconded and voted upon.

RESOLVED: that

a)            the Localisation of Council Tax Support Grant for Town and Parish Councils be withdrawn from 2017/18 onwards; and

b)            the WLDC contribution to the first £100 of Budget Requirement be continued at this time but reviewed for the 2019/20 budget.