Council Tax

Review of Council Tax Reduction schemes in England in 2021/22

Commissioned by: entitledto

  • Published 8th Jun 2021
  • Authors: Josh Holden, , Carla Ayrton, , Peter Kenway,
  • Category: Council Tax

A webinar done with entitledto where we discussed the details of this research including what’s changed this year and what trends we can see emerging, was recorded on 1 June 2021 and can be found here.

Council Tax Benefit (CTB), the national system of support for Council Tax bills, was localised and replaced in England by what is now known as Council Tax Reduction or Support (referred to as CTR) in April 2013. Such schemes reduce, sometimes to zero, the amount of Council Tax which a household has to pay.

While Scotland and Wales each brought in nationwide schemes to replace CTB, English councils were left to devise their own schemes for working-age residents. The full protection for pensioners provided by CTB remained a requirement of each local scheme. Councils were advised to devise schemes that encouraged work and which protected the vulnerable; however, defining ‘vulnerable’ was at the discretion of each local authority.

In its first year, 2013-14, central government funding for CTR was cut by 10% compared with what had been paid to councils the year before for CTB. From April 2014, funding for CTR was incorporated into the yearly central government grant that each local authority received, meaning it was no longer separately identifiable.

During this period, Universal Credit (UC) has also been introduced and is now operational in every local authority area in England. Around 60% of working-age benefit recipients in England now claim UC rather than any one of the six ‘legacy’ benefits that UC replaced. This has caused difficulties for local authorities in the administration of CTR. This is one reason why some local authorities have introduced income banded CTR schemes. Under such schemes, small changes in income (from benefits, earnings or other) do not usually change the amount of CTR.

In 2021/22 there were relatively few changes to CTR schemes. Eleven local authorities changed their minimum payment or band cap. Four schemes became harsher in some way, but five lowered their minimum payment. Three of these introduced an income banded scheme and removed the minimum payment for claimants in the first of these bands.

The data used in this analysis about local CTR schemes was collected by NPI and entitledto in early 2021. Each local authority’s website was reviewed to find out if there was a change to their CTR scheme between 2020/21 and 2021/22. If so, the details of the scheme are updated in our rolling dataset.

About this report
This report was funded by the entitledto and written the New Policy Institute. The facts presented and views expressed in this report are those of the authors and not necessarily those of entitledto.