In this webinar Policy in Practice gave a review of the 150 or so council tax reduction (CTR) support schemes we modelled for local authority clients in 2019. Zoe Charlesworth, Head of Policy, and Megan Mclean, Policy and Operations Analyst, recapped on highlights from our analysis, discussed trends we've identified and considered what this means for local authorities in 2020. For more information visit www.policyinpractice.co.uk, call 0330 088 9242 or email hello@policyinpractice.co.uk

1. Policy in Practice
webinar Lessons learned:
Our year modelling
council tax support
schemes
Wednesday 11 December 2019

2. Housekeeping
• Audio check
• Please ask questions
• Poll and a survey
• Aim to finish by 11:30

3. Today’s speakers
Zoe Charlesworth
Head of Policy
Policy in Practice
Megan Mclean
Policy & Operations Analyst
Policy in Practice

4. A team of professionals
with extensive
knowledge of the
welfare system who are
passionate about
making social policy
work
We help over 80 local
authorities use their
household level data to
identify vulnerable
households, target
support and track their
interventions
Our benefit calculator
engages over 10,000
people each day.
We identify the actions
people can take to
increase their income,
lower their costs and
build resilience

5. Agenda
• Trends and changes taking place in CTRS schemes this year
• A snapshot of CTRS schemes across the board this year
• Considerations and tools used to model outcomes when changing
CTRS schemes, identify vulnerability, target support and track
change
• Two case studies: income-banded and discount scheme modelling:
predicting the outcomes and benefits of CTRS scheme changes
• Looking forward and next steps

6. 666
Poll: What would your main
objective be if you were changing
your CTR scheme?

8. 888
Over to Zoe

9. CTS is significant
Findings from IFS: The impacts of localised council tax support schemes,
2019
• Paid to 4.9 million households in 2017–18
– more than any other means tested payment
• It cost LAs £4.1 billion
- 11% of gross council tax bills
• 2.4 million working-age claimants
- £1.8 billion
- average award for those claimants of £770 per year

10. Background
• 90% of English councils had made changes to their CTS scheme by
2018– 19;
- almost all of them cuts.
- up from 82% in 2013–14.
• The most widespread change was the introduction of minimum council
tax payments, by 2019:
- most common level of minimum payment was 20%
- a fifth of councils had no minimum payment,
- fifth have minimum payments of over 20%, (highest being 50%)
• In general, minimum payments had increased since 2013-14

11. Background
Often multiple changes:

12. Implications for claimants
• Working-age households in England are now eligible for 24% (£196 a
year) less on average
- 1.0% of their income
- £706 million reduction in entitlements:
• Cuts are now 70% more than in 2013–14.
• There are now 1.4 million households who have to pay some council
tax who would not have had to pay
- 63% must pay more than £100
- 33% must pay more than £200
- 10% pay more than £300.
• Reducing a household’s CTS entitlement significantly increases the
probability that it reports being in arrears on its council tax.
• CAB enquiries increased by 15-20% when minimum payments
introduced mostly relating to council tax debt

13. Implications for collection/arrears
• A quarter of the additional council tax liability is not collected
• For council tax claimants this is 10 times higher than the 2.5% in 2012–13,
before the cuts to CTS.
• The effect on the aggregate rate of non-collection is still relatively
modest increasing it from 2.5% to 2.7% on average.
• Arrears twice as likely in those moving from zero payment to those
increasing payment
- previous research showed a jump at 14% and 25%
• Lone parents and renters are more likely than average to fall into
council tax arrears as a result of changes in support

14. What are the drivers for change?
• Cost
• Administration
• Impact on collection rates
• Fairness
• Overarching council objectives
• Elections
But MOSTLY….
• Universal Credit - supporting the aims of UC or mitigating against loss
under UC

15. Drivers for change: Universal Credit
• Residents will need to re-assess income as they migrate to Universal
Credit so changes in Council Tax Support can be part of this
• A scheme to go alongside Universal Credit or to support those who
are adversely affected by Universal Credit
• The opportunity to use the Universal Credit assessment of income
• Realisation of the relative cost of administration against awards once
Housing Benefit is removed. Administration costs may be up to 25% of
scheme costs once CTR assessment is standalone
• Re-assessments with monthly Universal Credit changes / RTI

16. .
Drivers for change: understand context
 2.8m households would receive less
support under Universal Credit (38% of
households) than under legacy
benefits. The average loss is £52/week
 2.0m households would gain more
support under Universal Credit (29% of
households) than under legacy
benefits. Average gain is £26/week
 2.2m households will receive similar
levels of support (31% of households)
if they were in receipt of Universal
Credit or legacy benefits
38%
households
worse off
29%
households
better off
31%
households
no change
The impact of Universal Credit
Worse off Better off No change

17. Groups losing support:
• People living with
disability
• Self-employed
• Working homeowners in
receipt of tax credits
• Working lone parents
• Families with more than
two children
Drivers for change: understand context
-£76.00
-£42.00 -£43.00
-£16.00
-£40.00
-80
-70
-60
-50
-40
-30
-20
-10
0
Disabled Self-employed Working owner
occupiers
Working lone
parents
Familes with
more than 2
children
Average weekly change in support (£/week)

18. Drivers for change: administration
Number of claims
• Some councils may see a drop off in numbers under the default
scheme as households move to Universal Credit.
Number of re-assessments
• Data analysis of a full service site revealed the average number of
re-assessments in one year under legacy benefits is 3. The average
re-assessments for households in receipt of Universal Credit is 6
• Scheme design can minimise administration
• Introduction of additional elements such as de minimus rules and
using average income
Complexity of assessment
• Using Universal Credit assessment can minimise administration time
• Schemes can be simpler e.g. no tariff income, single non-dependant
deduction etc

19. Tracking trends: key changes
2019/20 schemes reveal some key trends:
1. Increase of prevalence of flat rate non-dependent deductions by
30%
2. Wide adoption of vulnerable and protected groups
3. Increasing minimum payment appears to have stalled
4. A move towards banded schemes

20. Trend: flat-rate non-dependent
deductions
• The number of flat-rate non-dependant deductions are increasing
• Levels of deductions are reducing
Number of flat-rate non-dependant deductions are
increasing but reductions are reducing
Deduction (1) Deduction (2)
2018-2019 27 councils
average: £30.78
21 councils
average: £45.66
2019-2020 35 councils
average: £29.79
29 councils
Average: £42.48

21. Trend: protection for vulnerable groups
• The groups chosen for protection differ according to local authority
priorities.
• Usually include those in receipt of disability benefits, lone parents with
younger children, those in LCWRA, carers
• Protection is typically based on 100% of liability
• A new groups is emerging as vulnerable: younger single households
with no dependents
Protection for vulnerable groups is increasing
Lone
parent
child U5
Lone
parent
child U3
ESA
support
ESA
WRAG
Disability
benefits
Carer
Couple
child U5
Child DLA
2018-2019 17 16 21 8 51 21 9 4
2019-2020 22 17 36 8 62 29 15 18

22. Trend: increase in income-banded
schemes
An increase in income-banded schemes
Income-banded schemes
5 bands 4 bands
Addition for
1 child
Addition for
2 + children
Addition for
couples
83% 12% 56% 56% 56%

23. Snapshot of now: the data
• The average max CTS in 2019/20 is 85% (a decrease of -2.7%).
• A third of councils have savings limits. Average is £12,911, lowest is
£3,000.
• A third of councils have CT band cap limits. Most commonly at band
D; 9 have Band A limit.
• 65 councils have minimum awards, average is £11.92/month
• 28 councils have income-banded schemes.

24. 242424
Poll: What kind of scheme change
are you considering?

25. 25

26. 262626
Over to Megan

27. 272727
Our modelling:
Comparing different CTRS
schemes and modelling case
studies

28. Why use modelling when comparing
schemes?
1. To understand the impacts of change to inform decision-making. In
particular to have data to inform final scheme modelling, for
councillor enquiries, and for public consultation
2. To understand the impact of Universal Credit on scheme cost and
award level
3. To avoid excessive gains and losses in support

29. How we model
We use administrative data
capturing detailed information on
low income households
We combine these datasets
together over time, and model
policies across four government
departments combined, to
examine the impacts both now and
in the future
CTR support now and in a future
scenario, both under the current
system or under UC

30. What we have modelled this year
150+ schemes for nearly 50 local authorities

31. Case study1: income-banded scheme
Model 1 - Income-Banded Scheme
● Scheme design is based on
Newcastle’s current income-
banded scheme.
● The income bands and related
discounts have been modified
to maintain cost neutrality with
the expected cost of the
council’s current scheme in
2020/21.
● Those on passported benefits
are protected by being
automatically awarded the
highest level of support.
Model 2 - Simple Discount Scheme
● Using the Universal Credit
working allowances to
determine the level of discount.
● As in Model 1, those on
passported benefits are
protected, in this case receiving
a higher discount than all other
households.

32. Case study1: income-banded scheme
Income-banded scheme Simple discount scheme
Cost £13.58M £13.57M
Administration
There is likely to be containment of
administration costs due to simplified
assessment and fewer re-assessments.
There is likely to be a reduction in
administration costs due to simplified
assessment and significant reductions in re-
assessments.
Claim #’s
182 claimants lose all support. These are
predominantly higher-earning households.
No reduction in claim numbers.
Social and
Political
impacts
182 households lose all support.
967 households would lose more than
£5/week. Couples without children are most
likely to lose more than £5/week.
1,011 households would gain £5/week.
Households with children are most likely to
gain £5/week. This model moves support to
households with children.
No households loses support altogether.
720 households would lose more than
£5/week. Couples without children are most
likely to lose more than £5/week.
1,000 households gain more than £5/week.
Households with children are most likely to
gain £5/week. This model moves support to
households with children.

33. 33
Income-banded scheme Simple discount scheme
% change in CTR compare to retention of current
scheme, by household type
% change in CTR compare to retention of current
scheme, by household type

34. Income-banded scheme Simple discount scheme
% change in CTR compare to retention of current
scheme, by tenure
% change in CTR compare to retention of current
scheme, by tenure

35. Case study 2: First discount scheme
We did an impact analysis on a new kind of scheme being adopted by
a council next year, the discount model. In this scheme, discounts on
liability are based on household characteristics, rather than income. This
model would substantially reduce administration costs and will simplify
the scheme both for those administering it.
Why the radical change ?
● Substantially reduces administration costs
● Simplifies the scheme both for those administering it, and for the
residents
● The council no longer has to undertake income or capital
assessments
● As more households move to Universal Credit administration costs
are likely to increase due to the expected re-assessment of claims

36. Case study 2: First discount scheme
Model 1 is based on the
current scheme with changes
to contain costs, simplify
administration and increase
fairness
Model 2 is the discount scheme where
discounts on liability are based on
household type rather than income
Households with children Discount
In receipt of PIP, DLA, or AA 85%
Passported or in receipt of Universal Credit and
not working
72%
All other households with children and net
earnings under £300/week
51%
Households without children
In receipt of PIP, DLA, or AA 85%
Passported or in receipt of Universal Credit and
not working
62%
All other households without children and net
earnings under £225/week
41%

37. 37
Model 1:
Current scheme with changes
Model 2:
Discount scheme
Cost
£0.76M more than the current scheme (2018/19)
and £0.49M less than if the current scheme was
retained into 2020/21.
£0.79M more than the current scheme (2018/19)
and £0.45M less than if the current scheme was
retained into 2020/21.
Administration
As more households move to Universal Credit
administration costs are likely to increase due to
the expected re-assessment of claims.
Significant administrative savings expected
compared to retention of current scheme into
2020/21.
Claim #’s 691 households lose support 235 households lose support
Political and
social impact
1,642 households will see their support reduce by
over £3/week – this is 16% of all working-age
claimants.
503 households are likely to gain more than
£3/week – this is 5% of all working-age claimants.
These are likely to be self-employed households in
receipt of Universal Credit.
2,515 households will see their support reduce by
over £3/week – this is 25% of all working-age
claimants.
1,752 households will see their support increase by
over £3/week – this is 17% of all working-age
claimants. These are more likely to be employed
and self-employed households and households
with children.
Distributional
impact
This model distributes reduction in support fairly
evenly across groups
This model is redistributive. It redistributes support
from those on legacy benefits to those in receipt
of Universal Credit

38. Key considerations
Universal Credit is coming and the status quo will not be neutral
The best scheme for a local authority will depend on:
• Demographics
• Current scheme
• Political climate
• Members’ objectives and local priorities
The effectiveness of your scheme can only be understood through
detailed cost and social impact analysis

39. 393939www.policyinpractice.co.uk
Questions and answers

40. Next steps
• Download Universal Credit Roadmap
• Download CTR modelling flyer
• Follow up email with this recording and slides, with links
Short 5 question survey now:
1. We value your feedback
2. Ask questions or clarifications
3. Request your own look at CTR modelling
4. Auto sign up to our next webinar: Designing effective data led local
authorities on Wed 15 Jan at 10:30

41. www.policyinpractice.co.uk
Thank you
Zoe Charlesworth
zoe@policyinpractice.co.uk
Megan Mclean
megan@policyinpractice.co.uk
hello@policyinpractice.co.uk
office 0330 088 9242