Island residents, struggling to pay their council tax, will have a smaller subsidy next year.
Instead of the 70 per cent discount offered by the Isle of Wight Council under the Local Council Tax Reduction Scheme (LCTRS) in 2021/22, the council will only offer 65 per cent. The council has also signalled next year could see a significant tax increase for all residents.
Wednesday’s full meeting of the Isle of Wight Council, agreed the cut to 65 per cent in an effort to save £336,000. Before the changes to the LCTRS were approved, councillors made passionate pleas not to reduce the support.
Cllr Andrew Garratt proposed to keep the support at 70 per cent. He said: “It is not a time to move a scheme that would hit those that have been hardest hit even harder; that is not fair. Some would describe it as cruel. I am sure none of the members of the council would want to intentionally and deliberately be that but acceptance of this recommendation would be just that.”
Cllr Garratt appealed to the majority Conservative councillors saying they would not be doing a disservice to their party by supporting him but they would do a tremendous disservice to those in need if they did not approve his motion.
Cllr Paul Fuller, said those on LCTRS are usually working but living day to day and it was unfair savings are trying to be found from people who can ill afford to lose support.
Cllr Geoff Brodie said he thought it was hypocritical the council had approved a pay policy which pays senior managers over six figures yet they are prepared to penalise people a few pounds when that money is important to be able to feed themselves.
Cabinet member for the Covid recovery and strategic finance, Cllr Stuart Hutchinson, said reducing the scheme was one of the most difficult decisions the council has to take. “We are already seeing a substantial increase in the number of claims for support and if we are not able to put more money into the system then what we have to do is to spread the butter more thinly,” he said. “We still have, of course, a very substantial hardship fund so those who are in true need can still be protected.”
Cllr Garratt’s amendment fell, with 17 only votes in favour compared to 20 against and two abstentions.
An exceptional hardship fund is available for those who need help from the council (more information can be found here: iow.gov.uk/Council/OtherServices/Local-Council-Tax-Support-Entitlement/Exceptional-Hardship-Fund), but councillors worried the bar was set too high. Figures, provided by Cllr Garratt, showed out of the £160,000 fund the council has, only £34,865 was given out, with 88 of 167 applications approved last year.
When the local council tax support scheme was introduced in April 2013, authorities received funding from government to replace the money lost from the lack of income. Since then, that funding has significantly reduced, effectively cut by £6.4 million, and in the coming financial year 2021/22 it is expected a funding gap of £3.23 million will be left. It is also expected more people will join the LCTRS as the impact of Covid-19 continues to be felt.
Cllr Brian Tyndall, cabinet member for corporate resources, said (while it is was a balancing act supplying services to all residents without hurting others) the changes to the scheme will also change the way universal credit affects those on LCTRS. The LCTRS changes were passed with 21 votes for, 16 against with one abstention.