Duncan Baxter, IRRV (Hons) Director Destin Solutions Limited Modelling for Local Support for Council Tax

Stages in scheme creation

Local Government Finance Bill Impact 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 1 st April 2013  Issue Demand Notices March 2013  Scheme in place – 31 st 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 demographics  Identifying Vulnerable Groups  Identifying current ‘spend’ on groups  Identifying 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 occupants Number of dependants Number of non-dependants Income Level Income Types Capital Level Discretionary Awards Ethnic Groups Benefits Data Council Tax Band Council Tax payable Benefit received Period of liability Disregards Discounts Disabled Reduction Parish Ward Full Address C T Data

Profiling examples Benefit TypeNo of claimantsBenefit paid Main Benefit1,000£2,000,000 -JSA500£800,000 -Standard500£1,200,000 Second Adult100£150,000 Age GroupBenefit Type No of claimants Benefit paid 18 – 24Main Benefit500£1,000,000 -JSA250£200,000 -JSA250£600,000 -Standard200£800, – 45Main Benefit250£600,000 -JSA100£150,000 CT Band Age Group Benefit Type No of claimant s Benefit paid A18 – 24Main Benefit500£1,000,000 A25 – 45Main Benefit250£200,000 A46 – 65Main Benefit250£600,000 B18 – 24Main Benefit200£800,000 B25 – 45Main Benefit250£600,000 B Main Benefit100£150,000 CT Band Age Group Benefit Type No of claimant s Benefit paid A18 – 24Main Benefit500£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 claimants  Identifying potential ‘non’ claims  Identifying potential ‘vulnerable groups’  Facilitates more creative schemes

Additional uses of ‘rich’ data Profiling /modelling Advanced reporting Enhanced signposting Trend Analysis Customer profiling Performance Management Single view of debt

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 £810 B£1,000 £850£900 E£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 example Claimant TypeNo of properties CT LiabilityCurrent Benefit % of total Working Age9,762£12,000,000£9,500,00067% Pension Age4,798£6,250,000£4,700,00033% Total14,560£18,250,000£14,200,00 0 Income LevelNo of properties CT LiabilityCurrent Benefit State Benefits7,598£9,200,000£7,800,000 Under £7,124223£275,000£200,000 £7,124 - £9,20484£95,000£70,000 £9,204 - £12,220121£150,000£129,000 £12,220 - £15, £150,000£100,000 Above £15,2361,613£2,139,000£1,200,000 BandNo of properties CT LiabilityCurrent 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