Summary of Independent R&B Discussion Group – 19 May 2025

The Independent Revenues and Benefits Discussion Group convened on 19 May to review recent trends in Council Tax Reduction (CTR) schemes, using a new report from Policy in Practice—authored by Izabel Bahia and Rachael Walker—as a starting point for discussion. The report charts changes in scheme design over the past five years and highlights growing concerns around affordability, fairness, and complexity.

Key Issues Raised

Declining Support and Escalating Arrears

The report identifies a steady decline in support for working-age households, with average maximum entitlement now below 90%. An estimated 570,000 households have lost CTR since 2016. Council tax arrears now total £6 billion, reflecting the mounting burden on households and the fiscal strain on local authorities.

Postcode Lottery and Local Pressures

Participants noted a clear pattern: councils in more deprived areas tend to operate less generous schemes despite already facing lower collection rates. The result is a systemic inequity that penalises low-income households based solely on geography.

Disagreement Over Localisation

A key point of contention was the ongoing rationale for localised CTR. Paul Howarth defended local discretion as central to council tax’s status as a local levy. Others, including Gareth Morgan and Sean O’Sullivan, argued for greater uniformity—highlighting the consistency achieved in Scotland and Wales and the administrative burdens introduced by diverging local policies.

The Politics of Reform

Kirsty Brooksmith described how political concerns—particularly over voter perception—had prevented her authority from moving away from a 100% support scheme, despite financial pressures. Naomi Armstrong and Rachael Walker raised issues around valuation anomalies, banding restrictions, and the unintended consequences of council tax reform on affordable housing.

Looking Ahead: Reorganisation and Alignment

With many areas undergoing local government reorganisation, alignment of schemes will soon become a necessity. As Malcolm Gardner noted, failure to prepare now will make future integration far more difficult—especially given the significant variations in scheme design, demographics, and debt levels.

Data Gaps and Missed Opportunities

The group also discussed a recent DWP report estimating £3.7 billion in lost benefit entitlements due to under-reporting of changes in circumstances. Concerns were raised about the barriers to effective data-sharing and the limitations of current legal frameworks, especially when compared to HMRC’s more integrated approach to information use.

Forward Look

The group will reconvene after the Spring Bank Holiday (no session on 27 May). Members are particularly looking forward to reviewing the forthcoming report from entitledto, which is expected to provide updated analysis on CTR scheme changes over the past year and may offer useful comparisons to the Policy in Practice findings.

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Slide pack, reports and tables

Please note that the handout contains additional slides covering other items of interest in the news and job adverts, which are provided in partnership with Business Smart Solutions (https://www.businesssmartsolutions.co.uk/).