duncan baxter, irrv (hons) director destin solutions limited modelling for local support for council...
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Duncan Baxter, IRRV (Hons)Director
Destin Solutions Limited
Modelling for Local Support for Council Tax
Stages in scheme creation
Local Government Finance BillImpact assessment - Communities for Local Government:
Authorities will be free to set their own eligibility criteria and rates of award for working age claimants.
We cannot predict exactly what authorities will choose to do.
Local Government Finance Bill
Adds in Schedule 1A LGFA 1992
Matters to be included in schemes
A scheme must state the classes of person who are to be entitled to a reduction under the scheme.
The classes may be determined by reference to, in particular— a)the income of any person liable to pay council tax to the authority in respect of a dwelling; b)the capital of any such person; c)the income and capital of any other person who is a resident of the dwelling; d)the number of dependants of any person within paragraph (a) or (c); e)whether the person has made an application for the reduction
Timescales for scheme
Effective from 1st April 2013 Issue Demand Notices March 2013 Scheme in place – 31st January 2013 Tax Base set – Nov/Dec 2012 Consultation – June 2012 Scheme Modelling – April 2012 Profiling – Now!
Stages in scheme creation
Profiling requirements
Understanding current demographicsIdentifying Vulnerable GroupsIdentifying current ‘spend’ on groupsIdentifying potential ‘cut backs’
Who are ‘vulnerable groups’?
Section 8 Local Government Finance Bill:Amends Section 13A:
(2) Each billing authority in England must make a scheme specifying the reductions which are to apply to amounts of council tax payable, in respect of dwellings situated in its area, by—
a) persons whom the authority considers to be in financial need, or b) persons in classes consisting of persons whom the authority considers to
be, in general, in financial need.
>INSERT DETAILS HERE
Available data sets
Single Housing Benefit Extract (SHBE)
Benefit system data Council Tax system data Electoral roll HMRC Other Internal databases
Number of occupants
Age of occupantsNumber of dependantsNumber of non-dependants
Income LevelIncome TypesCapital Level
Discretionary AwardsEthnic Groups
Benefits Data
Council Tax BandCouncil Tax payableBenefit received
Period of liability
DisregardsDiscountsDisabled Reduction
ParishWardFull Address
C T Data
Profiling examples
Benefit Type No of claimants
Benefit paid
Main Benefit 1,000 £2,000,000
- JSA 500 £800,000
- Standard 500 £1,200,000
Second Adult 100 £150,000
Age Group
Benefit Type
No of claimants
Benefit paid
18 – 24 Main Benefit
500 £1,000,000
- JSA 250 £200,000
- JSA 250 £600,000
- Standard 200 £800,000
25 – 45 Main Benefit
250 £600,000
- JSA 100 £150,000
CT Band
Age Group
Benefit Type
No of claimants
Benefit paid
A 18 – 24 Main Benefit
500 £1,000,000
A 25 – 45 Main Benefit
250 £200,000
A 46 – 65 Main Benefit
250 £600,000
B 18 – 24 Main Benefit
200 £800,000
B 25 – 45 Main Benefit
250 £600,000
B 46 - 65 Main Benefit
100 £150,000
CT Band
Age Group
Benefit Type
No of claimants
Benefit paid
A 18 – 24 Main Benefit
500 £1,000,000
- Attendance Allowance £200,000
- Carers Allowance £100,000
- Disability Living Allowance £150,000
- Maternity Allowance £150,000
- Statutory Sick Pay £150,000
Benefits of ‘rich’ data
Data not just limited to existing claimantsIdentifying potential ‘non’ claimsIdentifying potential ‘vulnerable groups’Facilitates more creative schemes
Additional uses of ‘rich’ data
Who needs to know? Local Authority
Accountants Revenues/Benefits
Major preceptors Local preceptors Members Electorate/Taxpayers Support Agencies (CAB,etc)
Stages in scheme creation
Interest of vulnerable
groups
Interest of taxpayer
Interest of Authority
Influences on modelling
Political Election campaigning Political view Cleansing
Financial Budget control Building up reserves/contingency
Schemes under consideration Current level of benefit – no reduction 10% reduction overall 30% reduction overall Capping to Band E Reduce capital limit to £6,000 Base on Income bands
Approaches to modelling
Top down
Remove attributes Refine attributes
Bottom up Add attributes
Percentage
Adjust tapers by percentage Apply to income bands
Capping •Cap at Council Tax Band•Cap at Income Level•Cap at Capital Level
Modelling example
CT Band
Average Benefit
Cap at Band E
Cap by Income
Reduce by 10%
A £900 £900 £900 £810
B £1,000 £1,000 £850 £900
E £1,400 £1,400 £1,300 £1,260
F £1,500 £1,400 £1,300 £1,350
H £1,800 £1,400 £1,500 £1,620
Modelling exampleClaimant Type
No of properti
es
CT Liability Current Benefit
% of total
Working Age 9,762 £12,000,000 £9,500,000
67%
Pension Age 4,798 £6,250,000 £4,700,000
33%
Total 14,560 £18,250,000 £14,200,000
Income Level No of properti
es
CT Liability Current Benefit
State Benefits 7,598 £9,200,000 £7,800,000
Under £7,124 223 £275,000 £200,000
£7,124 - £9,204 84 £95,000 £70,000
£9,204 - £12,220
121 £150,000 £129,000
£12,220 - £15,236
120 £150,000 £100,000
Above £15,236 1,613 £2,139,000 £1,200,000
Band No of properti
es
CT Liability Current Benefit
Disability premium
501 £620,000 £560,000
Severe Disability premium
175 £200,000 £160,000
Stages in scheme creation
Consultation
Consult major precepting authority Publish a draft scheme Consult other persons who are likely
to have an interest in the scheme Limited details at present
Stages in scheme creation
Monitor/review the scheme
Keep track of total spend to budget Forecasting likely shortfall/surplus Consider scheme modifications Add additional data sets for
modelling
Summary
Need to profile now Use the richest data possible Determine the ultimate aim of the
scheme Consider all options Monitor the scheme closely