Clause 8 — Council tax reduction schemes
Bills Presented — Department for Environment, Food and Rural Affairs (Relocation to Bristol) Bill
Andrew Stunell (Parliamentary Under Secretary of State, Communities and Local Government; Hazel Grove, Liberal Democrat)
I want to make some progress.
It is essential that local authorities plan their schemes carefully and take account of possible changes in demand, as pointed out in the debate. As we have set out previously, we believe that those in-year pressures that hon. Members have mentioned can be managed by enabling any deficit in the collection fund to be shared between billing and major precepting authorities. Our scheme will do that. We are taking powers in the Bill to allow billing authorities to make arrangements with major precepting authorities
and to vary the amount of precept to be paid to the major precepting authorities in-year to rectify any shortfall in council tax receipts. That could help to protect billing authorities, which could include small district councils—my hon. Friends mentioned that some district councils are indeed small organisations.
Amendment 85 would require the Government to carry out a new burdens assessment on their allocation of grant, but the Government have already committed to consult on their proposals for distributing the grant. We must be clear that local authorities have to make choices, but they will be able to choose whether to pass on the reduction to council tax payers, to use the flexibility over council tax, which my hon. Friend the Member for Bradford East mentioned, or to manage the reductions within their budgets.
To the best of my reckoning, 12 local authorities come within the constituencies of Members who have spoken in this debate, and 10 of those local authorities are in a position whereby if they were to take advantage of the new flexibilities over second homes and empty homes, they would achieve an income increase exceeding the 10% reduction in their council tax benefit grant. I am not saying that it is right for local authorities simply to gobble up all that money, but I want to make the point—