Agenda item

Report of the Deputy Chief Executive (Place)

The Cabinet considered a report of the Deputy Chief Executive (Place) that set out the proposed Council Tax Base for 2018/2019.

The Council tax base was the measure of the taxable capacity of an area, for the purpose of calculating an authority's Council Tax. It represented the estimated number of Band D equivalent chargeable dwellings for the year.  It also took into account the authority's estimated Council Tax collection rate.

The report made the necessary calculations in accordance with the Local Authorities (Calculation of Council Tax Base) Regulations 2012 to establish the Council Tax base for the City Council and its parishes. These regulations applied to financial years beginning 1 April 2013 onwards, and included the impact of the change, from awarding Council Tax benefit to the introduction of a Council Tax Support Scheme (also known as the Council Tax Reduction Scheme).

The Council Tax base for the City Council would be used by major preceptors when setting their precepts. Following the election of the Mayor of the West Midlands on the 4 May 2017, and in accordance with the relevant legislation (The Combined Authorities (Finance) Order 2017), 2018/2019 was the first year that the costs of the Mayor could be met from a precept issued by the West Midlands Combined Authority.

Under the Reduction Scheme, the Council Tax base was reduced according to the amount of reductions awarded under the scheme, as the authority would be foregoing the relevant Council Tax income, and instead would receive partial compensation via an adjustment within the Local Government Finance Settlement calculations. These reductions were reflected in the calculation of the Council Tax base, in order to calculate the correct amount of Band D Council Tax for the billing authority (Coventry City Council), the major preceptors (West Midlands Police and Crime Commissioner, the West Midlands Fire and Rescue Authority and the West Midlands Combined Authority), and the local precepting authorities (Allesley Parish Council, Finham Parish Council and Keresley Parish Council).

It was estimated that the effect on the tax base of the Support Scheme would be to reduce it by 15.0%. The financial impact of the reduction in tax base would be partially offset by an element of the overall funding settlement from Government.

The tax bases for the parishes of Allesley, Finham and Keresley would also be reduced by 15.0% as a result of the Council Tax Support Scheme. It was proposed that the Council transferred an element of the compensation described above to offset the impact of the reduced tax base on tax income for the parish councils. Recommendation 3 of the report proposed that Allesley, Finham and Keresley received payments of £1,311, £3,336 and £243 respectively to offset the effect of the tax base reduction. These payments had been calculated to offset 90% of the effect of the tax base reduction, in keeping with the compensation percentage adopted when the scheme was first introduced. The details of the calculations were provided in Appendix E to the report.

The report did not set the actual level of Council Tax in Coventry; that would be set by Council on the 20th February 2018. The determination of the tax base was one part of the process and must occur before 31st January each year.

The technical nature of this report reflected the fact that the tax base calculation was prescribed by statute. The tax base measured all properties in an area, relative to a Band D property even though this was not representative of the typical domestic property in Coventry. In fact 87% of properties in Coventry fell into Bands A to C, which attracted lower bills than Band D properties.

RESOLVED that the Cabinet approves:

1)  That the Council Tax collection rate for 2018/2019 be set at 98.3%

2)  That, in accordance with the Local Authorities (Calculation of Tax Base) Regulations 2012, the amounts calculated by the City Council for 2018/2019 shall be:

  a net tax base of 80,815.4 for the whole of the City Council area made up as follows:

3)  That the following grant payments should be made to parish councils to reflect the impact in 2018/2019 of Council Tax reductions on their tax bases.