Agenda item

Council Tax exemptions and discounts

Request Exeter City Council to lobby both of our local Members of Parliament, the Local Government Association and the Department for Communities and Local Government to require central Government to include in future annual Local Government financial settlements full reimbursement to Local Authorities, Police and Crime Commissioners and Fire and Rescue Services for losses of council tax income due to nationally legislated exemptions and discounts.

Councillor M. Mitchell, seconded by Councillor Read, moved a Notice of Motion in the following terms:-

Council Tax exemptions and discounts.

Request Exeter City Council to lobby both of our local Members of Parliament, the Local Government Association and the Department for Levelling Up, Housing and Communities to require central Government to include in future annual Local Government financial settlements full reimbursement to Local Authorities, Police and Crime Commissioners and Fire and Rescue Services for losses of council tax income due to nationally legislated exemptions and discounts.

In presenting his Motion, Councillor M. Mitchell made the following points:-

·         the Motion aimed to restore some fairness within the Council tax regime, so that Councils could determine spending priorities in their areas. Successive Governments had viewed Council Tax as the main source of local government funding with Councils increasingly required to compete with other local authorities for Government funding for projects. As a result, some Councils had used other income sources such as establishing property companies;

·         although Governments over the years had introduced exemptions and discounts through a Council Tax support scheme, each local authority was impacted differently. An example was the Government reimbursing local authorities for the loss of council tax on the annexe or ‘granny flat.’ Exeter had just six such annexes with a total of £7,632 income recovered. In East Devon there were 107 such annexes or granny flats exemptions and accordingly the District Council received a greater amount;

·         one of the principles behind the Motion was that each local authority should be fully reimbursed by the Government for the losses of council tax income due to nationally determined exemptions and discounts;

·         in Exeter there were currently 7,500 exempt properties and the loss of Council Tax from these amounted to approximately £13 million a year to the precepting authorities. Over 20,000 people in Exeter received discounts largely the 25% single occupier discount and the total sum involved is nearly £9 million, and 4,450 individuals are assisted by the means tested local support scheme which equates to £7 million;

·         whilst there was an element of Government grant funding formula, it was not a recognisably accountable system; and

·         an equitable Council Tax system should be a means to ensure proper accountability.

The Portfolio Holder for Communities and Homelessness Prevention, in supporting the Motion, referred to previous lobbying for reforms of the Council Tax system. Introduced some 20 years ago it was no longer fit for purpose and, whilst it was appropriate that there continued to be exemptions for those needing support, there should be greater Government support for local authority financing.

Councillor Jobson, as leader of an opposition group, stated that the Government should also be lobbied in respect of commercial operators of Houses in Multiple Occupation (HMO’s) and Purpose Built Student Accommodation (PBSA) whose properties were occupied by students who were one of the exempt classes. In respect of HMOs, a change in the system might encourage some landlords to rent to a wider range of tenants than students.

The Leader, stated that he would be supporting the Motion and advised that Council Tax exemptions had originally been put in place to support families sending their children to university and living away but that it was now a scheme that was being abused.

Councillor M. Mitchell, in concluding, hoped that the premise of the Motion would offer a practical and deliverable system to improve local authority accountability. He agreed with the Member’s comments in respect of commercial operators.

Councillor M. Mitchell commended the Motion to Council.

The Notice of Motion was put to the vote and CARRIED unanimously.