Agenda and draft minutes

RESOLVED that the minutes of the meeting held on 24 November 2022 be confirmed.

Please note that, in accordance with the Members' Code of Conduct, when declaring interests members must disclose the existence and nature of the interest, and whether it is a disclosable pecuniary interest (DPI) or personal and/or pecuniary.

No declarations of interest were received.

Purpose of Report

To provide the Shared Revenues and Benefits Joint Committee with an update on performance in the Revenues and Benefits Shared Service.

Decision

That the report be noted, and an update be presented to the next meeting of the Committee on 27 June 2023.

Alternative Options Considered and Rejected

None.

Reason for Decision

The report provided information on revenues performance for Quarter 3 2022/23 in respect of (a) council tax for the City of Lincoln Council and North Kesteven District Council; and (b) business rates for the City of Lincoln Council, North Kesteven District Council and West Lindsey District Council. Comparisons to the national and local position in terms of performance were provided, where possible.

The Revenues and Benefits Shared Service had now been in operation for more than eleven years since 1 June 2011, and performance had largely been maintained and improved whilst continuing to provide value for money. Continual improvement and success was being achieved in both statistical and financial performance, as well as positive outcomes for customers of the partner local authorities. However, the Covid-19 pandemic had understandably impacted on some areas of performance and these impacts were likely to continue for many more months.

In respect of Council Tax, up to the end of Quarter 3 2022/23, in-year collection for Lincoln and North Kesteven was up by 1.76% and 0.75% respectively. However it should be noted that in appropriate circumstances Council Tax Energy Rebate payments had been credited to Council Tax accounts, as well as Council Tax Hardship Fund monies being allocated, which would be ‘inflating’ collection performance. Officers continued to monitor and manage collection closely. As at the end of January 2023, Council Tax in-year collection was up by 2.13% and 0.62% for City of Lincoln and North Kesteven respectively, compared to the end of January 2022.

In terms of the trend in Council Tax (CTS) caseloads, it could be seen that caseloads rose sharply in 2021 as an outcome of the impact of Covid-19 on the economy and residents’ incomes. The caseload then plateaued somewhat, however, with the ongoing cost of living pressures on residents, there was the potential that these caseloads may rise again.

In terms of Business Rates, up to the end of Quarter 3 2022/23, compared to the same point in 2021/22 in-year collection was up for all three local authorities: Lincoln (by 1.40%), North Kesteven (by 4.57%) and West Lindsey (by 7.62%). Although this was positive, it should be noted that for all three local authorities Covid Additional Relief Fund (CARF) monies had been added to accounts – and where ratepayers paid in full last year – there may be a credit for 2021-22 which was offsetting against this year’s liability. Collection also continued to be ‘skewed’ somewhat in recent financial years due to varying criteria/awards of the Expanded Retail Discount (ERD).All three collections were less ‘up’ compared to the end of Quarter 2 2022/23, so was perhaps starting to demonstrate a more accurate position on collection as  ...  view the full minutes text for item 16.

Purpose of Report

To provide the Shared Revenues and Benefits Joint Committee with the third quarter’s (ending 31 December 2022) performance for the Revenues and Benefits Shared Service for 2022/23, as detailed at Appendix 1 to the report.

Decision

That the actual position as detailed within the report be noted.

Alternation Options Considered and Rejected

None.

Reason for Decision

The approved budget for 2022/23 was agreed by the Shared Revenues and Benefits Joint Committee on 8 February 2022, which set a budget of £2,516,830 for the service.

At Quarter 1 the budget was increased to reflect New Burdens grants totalling £22,115, giving a revised budget of £2,538,950.

Financial performance for the third quarter of 2022/23 as detailed at Appendix 1 of the officer’s report resulted in an overspend against the approved budget of £73,440, a deterioration of £76,040 since quarter two.

The forecast outturn for 2022/23 predicted that there would be an overspend against the approved budget of £107,405, a deterioration of £74,635 from quarter 2, as detailed at Appendix 2 of the officer’s report.

The main forecast year-end variations against the approved budget for 2022/23 were noted within the table at paragraph 4.5 of the officer’s report:

The key factor behind the deterioration in the forecast outturn at quarter three was the impact of the pay award, paid in December 2022, which was significantly higher than the budgeted pay award of 1.75% assumed within the base budget. The total impact across the shared service was £87,100.

The other key driver of the forecast overspend within the Revenues Local Taxation team was due to additional postage and IT costs as a result of administering the Council Tax Energy Rebate payments. Each Council had received a grant to compensate them for this, along with other administration costs associated with these payments, however these grants sat outside of the shared service budget.

For the period 1st April 2022 to 31^st December 2022, new burdens grants had been received from Central Government as follows – City of Lincoln £59,673 and North Kesteven £64,514. These additional grants should be taken into consideration when assessing the forecast overspend.

It was noted that financial pressure was felt across the whole board with all local authorities feeling the extreme strain on resources in the budgetary process.

Purpose of Report

To present the Base Budget Forecast for the Revenues and Benefits Shared Service for 2023/24.

Decision

1.    That the Base Budget Forecast for the Revenues and Benefits Shared Service for 2023/24 be approved.

2.    Officers to report back to the next meeting of this Committee following further investigations made on any advances in technology to enable the service to further benefit for similar or less amounts of money.

Alternative Options Considered and Rejected

None.

Reason for Decision

The Base Budget Forecast for 2023/24 was included at Appendix 1 to the report, including a full reconciliation to the previous Base Budget Forecast outlined in Appendix 2.

Over the past decade costs had increased due to inflationary and other service pressures, with the Base Budget Forecast for 2023/24 of £2.879m, £530.4k higher than the initial Base Budget set in 2012/13, equivalent to an average increase of 2% p.a. Despite inflationary increases, ongoing efficiencies continued to be delivered by the Shared Service.

A full review of each line of the budget had taken place to ensure a fair representation of the activity of the service. This had led to budgets being transferred between different shared service functions but had not resulted in either authority significantly paying more than the other.

As a result of inflationary pressures there had been a significant increase in the base budget from last year, in the main, due to the significantly higher than anticipated pay award in 2022/23 (as agreed nationally, all pay scales were increased by a flat rate £1,925) compounded by an increased pay award forecast for 2023/24, alongside this City Council’s primary pension contribution rate had increased from 17.3% to 23.4% increasing employee costs further. A full reconciliation to the previous Base Budget Forecast was included as Appendix 2 to this report.

It was agreed that further investigations would be carried out by officers on any advances in technology available which would enable the service to further benefit for similar or less amounts of money. This would be fed back to the next meeting of this Committee.

Purpose of Report

To provide the Shared Revenues and Benefits Joint Committee with an update on current issues within non-domestic rates, related to City of Lincoln Council, North Kesteven District Council and West Lindsey District Council.

Decision

That the content of the report be noted.

Alternative Options Considered and Rejected

None.

Reason for Decision

The report focused on the changes announced as a result of Covid-19 and the support provided to businesses in the form of relief, – as grants were not directly paid by the Revenues and Benefits Shared Service, these were not covered in this report. The report also focused on the financial impact of recent appeals and reductions to rateable values.

Focus for both Government and billing authorities since the last meeting of Joint Committee had been a continuing response to Covid-19 measures announced since 11 March 2020.

The following updates were noted:

Expanded Retail Discount

The Expanded Retail Discount (ERD), first announced in response to the Covid19 pandemic and its impact on specific business sectors, was set to continue for a fourth year in 2023/24. The level of relief available under the discount had varied over the four years under a number of other parameters.

For 2023/24 the Chancellor set out:

•       An increase in retail, hospitality and leisure relief from 50% to 75% up to £110,000 per business

•       A freezing of the multipliers for a further year at 49.9p (small business multiplier) and 51.2p (standard multiplier)

•       Historically at the beginning of every new Rating List there had been a transitional scheme which phased in a large increase in liability for the Non Domestic Rates and this was offset by phasing in large decreases in liability. However, the transitional scheme for 2023, phased in large increases but there was no phasing of decreases and those customers would feel the benefit of any reduction in their rateable value immediately.

•       The Supporting Small Business Relief scheme would cap increases at £600 a year for any business losing eligibility for some or all Small Business Rate Relief or Rural Rate Relief at the 2023 revaluation.

•       The scope of the discount for 2023/24 would return to pre-Covid-19 eligibility retail properties. Hospitality and leisure properties would continue to remain in scope, and the Rateable Value continued to be uncapped.

Properties that would benefit from the relief would be occupied hereditaments that were wholly or mainly being used:

a)    as shops, restaurants, cafes, drinking establishments, cinemas and live music venues;

b)    for assembly and leisure; or

c)    as hotels, guest & boarding premises and self-catering accommodation.

Government would continue to reimburse LA’s that used their discretionary relief powers under Section 47 of the Local Government Finance Act 1988 (amended).

In terms of Expanded Retail Discount (ERD), the table at paragraph 4.5 of the officer’s report reflected the significant discounts awarded in the last three years along with an estimate on the award to be granted in 2023/24. The table also set out the level of discount applied, ranging from  ...  view the full minutes text for item 19.

Purpose of Report

To provide the Shared Revenues and Benefits Joint Committee with an update regarding various areas relating to the national welfare reform agenda, as well as current initiatives to support residents.

Decision

That the content of the report be noted, with a further update to be presented to the next meeting of Shared Revenues and Benefits Joint Committee

Alternative Options Considered and Rejected

None.

Reason for Decision

This report provided Shared Revenues and Benefits Joint Committee with an update on the national and local position of welfare reform/other initiatives, with a specific focus on Universal Credit, Discretionary Housing Payments, Household Support Fund, Council Tax Energy Rebate, and Financial Inclusion matters.

The national Welfare Reform agenda had resulted in a significant impact on residents of Lincoln and North Kesteven since 2013 when certain changes were introduced such as Removal of Spare Room Subsidy, and Benefit Cap; this had continued as further changes had been introduced, such as the ongoing rollout of Universal Credit. These changes had resulted in major changes to the operation of our shared service, to ensure a proactive and positive response to welfare reform and the impacts on residents.

The following updates were noted:

Universal Credit

On 25^th April 2022, the Secretary of State for Work and Pensions made a statement in the House of Lords (regarding managed UC migration for working-age legacy benefits – with the aim of completing this migration by the end of 2024. Further information regarding the migration process was published on GOV.UK (Completing the move to Universal Credit - GOV.UK (www.gov.uk)) and since then, an initial 500 cases in Bolton and Medway areas had been invited to migrate from legacy benefits to UC. Further sites were announced over summer 2022, with 250 migration notices issued in Truro, Falmouth, Harrow and Northumberland as part of the UC ‘discovery phase’.

On 10^th April 2023, DWP released a research and analysis document entitled ‘Completing the move to Universal Credit: Learning from the Discovery Phase’, Completing the move to Universal Credit: Learning from the Discovery Phase - GOV.UK (www.gov.uk)

There was currently no further detail as to the rollout schedule for other areas of the country, officers had made contact with DWP colleagues locally and nationally and would report back to this Committee with relevant updates at future meetings.

Discretionary Housing Payments (DHP)

City of Lincoln’s DHP government grant for 2022/23 was £129,643 and North Kesteven’s £85,166. The recent mid-year additional DHP grant announcement had increased both amounts marginally, therefore 2022/23 grants were now £132,330(Lincoln) and £86,931 (North  ...  view the full minutes text for item 20.