Agenda item

Calculation of the 2023/24 Council Tax Base for North Tyneside Council

To consider a report which gives an explanation of how the North Tyneside Council Tax Base for 2023/24 has been calculated and requests approval for the calculation of the Authority’s Council Tax Base for 2023/24.



Cabinet considered a report which provided an explanation of how the proposed North Tyneside Council Tax Base for 2023/24 had been calculated and requested approval of the calculation for 2023/24.


The detailed Council Tax Base calculation for North Tyneside for 2023/24 was attached as Appendix A to the report, together with an explanation of the specific elements that formed part of this calculation. Within this calculation, adjustments had been made to reflect the effect of exempt properties, disabled relief, discounts and premiums. Specifically, these adjustments included: 


·        The estimated number of dwellings to be demolished during 2023/24;

·        Assumed growth from anticipated new build properties during 2023/24 based on current estimates from the Planning Department;

·        The estimated number of dwellings where the liable person qualifies for a disabled reduction;

·        The estimated number of exempt dwellings during 2023/24;

·        The Council Tax Support scheme in 2023/24; and

·        The estimated number of premiums which apply to long term empty properties in 2023/24. 


Applying the factors above adjusts to total number of properties to a common base for each band, in terms of full year equivalents.


The Council Tax Base Regulations ensured that the Council Tax Base for an area took into account the effect of disability reductions in respect of dwellings which fell within Band A. They introduced an additional ‘alternative valuation band’ to allow Band A properties to qualify for a disabled reduction. Previously, properties adapted to meet the needs of a disabled person were charged at a rate equal to the next lowest valuation band, so for example a qualifying Band D property would be charged at a Band C rate, but this had not applied to Band A properties. Instead of paying the normal Band A charge (six-ninths of the Band D) a qualifying Band A property was now charged five-ninths of the Band D charge.


For the purpose of the Council Tax Base calculation, it was now necessary to show Band A properties which qualified for a disabled reduction as if it were an additional valuation band. Deductions were then made for exempt dwellings and the estimated impact of the Council Tax Support scheme for 2023/24.


The Council Tax Base calculation for 2023/24 converted the number of dwellings within each of the Council Tax Bands into , A – H, had been Band D equivalents, using the appropriate proportions. The result of this calculation for 2022/23 was to produce a total number of properties prior to an allowance for non-collection and contributions in lieu of 63,596.


The next stage of the Council Tax Base calculation involved making a deduction for the non- collection of Council Tax. This non-collection element of the calculation was made in respect of the amounts that were legally due, but which, for varying reasons, may not be collected. The assumed Council Tax collection rates for North Tyneside had improved significantly since 1993/94, when the assumed collection rate was 95%. The assumed North Tyneside Council Tax collection rates for each year from when Council Tax had been introduced in 1993/94 were detailed in the report.


A fundamental issue for the Council Tax Base calculation was the assumed percentage Council Tax collection rate to apply. The Authority’s performance on Council Tax collection had been improving for many years, reaching a peak of 99.20% in setting the Council Tax Base for 2012/13. However, since 2013/14, a lower collection rate of 98.50% was proposed and agreed to reflect the estimated impact of the Council Tax Support Scheme, the estimated impact of other Welfare Reform changes and changes to Exemptions and Discounts applied. This assumed collection rate continued, but in 2021/22 for one year, a lower rate of 98% was agreed to reflect the impact of Covid 19.  


Council Tax in year collection had been challenging in recent years due to the impact of Covid-19, and it was likely that 2023/24 would continue to see in year collection being difficult due to the rising cost of living and the impact this was having on resident’s incomes. As at the end of November 2022 the in-year collection for 2022/23 is 0.10% ahead of 2021/22 at the same point, which was an improvement against the 2020/21 figure. However, the Authority was still behind by 0.40% against the collection rate at the same point in 2019/20. The collection rate at this point was only an approximate indicator of the assumed Council Tax collection performance, given the significant time lag effect between in year and ultimate/long-term Council Tax collection performance.  Whilst the Authority did see an increase in residents claiming Local Council Tax Support during 2020/21, the number claiming was now reducing.


Having considered various issues in relation to the collection rate for 2023/24, which were detailed in the report, it was proposed that an assumed Council Tax Collection Rate of 98.50% was set as part of the 2023/24 Council Tax Base calculation, which was the same assumed collection rate that was in place when setting the 2022/23 budget and was still considered to be achievable long term. In-year collection has improved against 2021/22 at the same point, recovery of Council Tax debt was ongoing, and the number of Council Tax Support claims are reducing. The Authority was still mindful that, since 2020/21, working age Council Tax Support claimants have been further assisted with up to £150.00 additional support against their Council Tax, and this would continue in 2023/24.


The final stage of the Council Tax Base calculation involved adding an estimated amount in respect of contributions in lieu of Council Tax to be made to the Authority, which was expressed in terms of the number of Band D equivalent properties. For 2023/24 this figure for the Authority, which related to Ministry of Defence properties, was 50 Band D equivalent properties.


An increase in the collection rate increased the Council Tax Base and a reduction in the collection rate reduced the Council Tax Base. An illustrative example of the impact of different Council Tax collection rates was shown in section 1.6.1 of the report. There were no increases shown beyond 98.5% as this was not felt viable in the current economic situation. 


The 2023/24 Council Tax Base for the whole of North Tyneside after the allowance for non-collection and payments in lieu was 62,692 Band D equivalent properties.  This equated to an increase of 463 Band D equivalent properties compared to the 2022/23 figure.   


Cabinet considered the following decision options: to set the 2023/24 Council Tax Base for North Tyneside Council using an assumed Council Tax collection rate of 98.50% and agrees the change to the Council Tax Support Scheme, or alternatively, not to agree the proposed Council Tax Base calculation and asks officers to undertake further work on the proposal.


Resolved that (1) the report on the calculation of North Tyneside’s Council Tax Base for 2023/24, be approved; and

(2) the assumed Council Tax collection rate for 2023/24 was set at 98.50% and therefore the amount calculated by North Tyneside Council as its Council Tax Base for 2023/24 will be 62,692 Band D equivalent properties, pursuant to this report and in accordance with the Local Authorities (Calculation of Council Tax Base) (England) Regulations 2012, be agreed.


(Reasons for decision: The proposed 98.50% assumed Council Tax collection rate, is felt to be achievable for the reasons set out in paragraph 1.5.13 of this report.


The risk of setting a Council Tax collection rate too high is that this can result in a deficit position for the Council Tax element of the Collection Fund, which in turn will have to be funded by the Authority’s General Fund.


This collection rate is reviewed as part of the annual Council Tax Base calculation, and the 98.50% collection rate will be reviewed in determining the Council Tax Base for 2024/25.)



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