Council Tax Reduction in Scotland: 2023-2024

3. Weekly Income Forgone Estimates

The CTR scheme reduces the amount of Council Tax a local authority can expect to receive.The Scottish Government provides funding to each local authority to reflect that their Council Tax income is lower due to CTR. Weekly income forgone figures are reported monthly and the following section provides the most recent data. The weekly income forgone estimates are based on the number of CTR recipients multiplied by the average weekly CTR amount per recipient for each local authority and benefit type for the given month. When a household’s Council Tax liability is reduced due to the CTR scheme, it reduces the amount of Council Tax a local authority can collect.

The total Council Tax weekly income forgone due to CTR was £7.543 million in March 2024, an increase of 2.4 per cent compared to March 2023. This increase is in line with the increase in CTR recipients mentioned above during this period. Despite CTR recipients being almost the lowest ever recorded, the total weekly income forgone by local authorities due to CTR in March 2024 is still higher than pre-pandemic level and higher than the level observed at the start of the scheme. This is due to the fact that Council Tax increases lead to increases in the cost of the CTR scheme, as many households receiving CTR get a 100% reduction, the cost of which increases with rises in Council Tax.

A breakdown of the total weekly income forgone by each local authority between March 2023 and March 2024 is shown in the supplementary tables. Glasgow City accounted for one-fifth (20 per cent) of the total weekly income forgone for Scotland followed by City of Edinburgh (7.1 per cent) and North Lanarkshire (6.7 per cent) in March 2024. This is consistent with the higher numbers of CTR recipients recorded for these local authorities and is similar to the proportions observed in March 2023.

3.1 Weekly income forgone over time

The total weekly income forgone estimates for Scotland (see section 5 for more details) have increased from £7.092 million in April 2013 to £7.543 million in March 2024. The income forgone estimates follow the same general pattern as the number of CTR recipients, with the exception of April 2017, 2018, 2019 and 2022 where there was a large increase in the income forgone from the previous month as a result of an increase in Council Tax between March and April of each year (as shown in Figure 1 on page 1). In April 2020 there was a large increase in both the number of CTR recipients and income forgone due to the economic impacts of the Covid-19 pandemic whilst in April 2021, Council Tax rates were frozen so there were no resultant increases associated with Council Tax increases at that time. 

Until March 2020, all local authorities had seen a decrease in their weekly estimates of CTR income forgone since April 2013, driven by a decrease in CTR recipients, with the exception of Aberdeenshire whose weekly estimate of CTR income forgone had increased by just over £10,000 in March 2020 (after a reported rise of just under £5,000 in March 2019) when compared to April 2013. 

The number of CTR recipients and weekly income forgone have been closely linked, with most of the variability in income forgone being driven by the number of CTR recipients. However in April 2020, the weekly income forgone increased sharply by 10.6 per cent from the previous month as a result of the annual increase in Council Tax but also the increase in CTR recipients (4.4 per cent) as a result of the initial economic impacts of Covid-19 resulting in more claimants and therefore recipients of the CTR scheme. This is the largest monthly rise for both weekly income forgone and CTR recipients since the CTR scheme began. As a result, the weekly income forgone in March 2021 was higher than when the scheme began in April 2013.

In March 2024, four local authorities had seen a decrease in their weekly estimates of CTR income forgone since the scheme began, with West Dunbartonshire’s weekly estimate of CTR income forgone £17,000 less in March 2024 than when compared to April 2013. Further information on the Income Forgone changes since the CTR scheme began in April 2013 can be found in the Recipients and Income Forgone tables.

Figure 17 shows the month-on-month percentage changes in the number of CTR recipients and the weekly income forgone for April 2013 to March 2024. Rather than a sustained increase in income forgone, the chart spikes in April annually since 2017 (whilst the numbers of CTR recipients continue to decrease) due to changes in Council Tax or as a result of the annual uprating of the Council Tax Reduction scheme allowances and premiums. After the increases in Council Tax, the month-on-month comparisons decrease and follow previously observed patterns with the exception of 2020 where the number of recipients and weekly income forgone continued to rise and peaked in August 2020 due to the economic impact of Covid-19. Figure 17 also shows small peaks in the number of CTR recipients and weekly income forgone at the beginning and middle of each calendar year, indicating a possible seasonal effect.

Figure 17: Percentage change in monthly income forgone spikes annually in April while CTR recipients remains relatively stable

Month-on-month percentage change in CTR recipients and weekly estimates of income forgone, April 2013 to March 2024, Scotland

The Recipients and Income Forgone tables, previously published (14 May 2024) for the March 2024 data release, show an increase in the on-going costs of the scheme compared to March 2023. The cost is higher than pre-pandemic levels and is now higher than the level observed at the start of the scheme. CTR numbers have generally increased in 2023-24, alongside an increase in the weekly income forgone. Other factors that affect the total income forgone by local authorities include age, structure of the population and household income.

The weekly income forgone estimate for each local authority for each month between April 2013 and March 2024 are also provided in the Recipients and Income Forgone tables.

3.2 Average weekly awards by passported status

In March 2024, the average weekly award per CTR recipient was £16.34 per week (resulting in average savings of just under £850 a year on Council Tax for CTR recipients), an increase from March 2023, when the average weekly award was £16.21. The average weekly award in April 2023 was £16.37 and decreased slightly over the course of 2023-24.

Average weekly award per CTR recipient varied by both local authority (ranging from £14.15 to £19.42) and passported status in March 2024. These figures are included in the supplementary tables. Of passported benefits, Income Support, Employment Support Allowance and Pension Credit CTR recipients saw increases in average weekly awards per CTR recipient in March 2024 compared to March 2023, whilst Job Seekers Allowance CTR recipients remained the same in this period. Figure 18 shows the average weekly award per CTR recipient by passported status. Some key variations are:

• Non-passported CTR recipients who were not in employment increased (by £0.30) in average award in 2023-24. 
• Non-passported CTR recipients who were in employment received on average £15.32 per week (having decreased the most by £0.39 compared to March 2023). 
• On average, those on Income Support received the most at £19.08 per week, whilst those non-passported and in employment received the least at £15.32. 
• Passported income forgone will generally be higher (£17.25 in March 2024), by virtue of being on a passporting benefit. These CTR recipients will be in receipt of full CTR in almost all cases compared with £15.76 for non-passported CTR recipients in March 2024.

Figure 18: Income Support, Employment Support Allowance and Pension Credit CTR recipients saw increases in average weekly awards per CTR recipient

Average weekly award by passported status, comparison of March 2023 and March 2024, Scotland

The average weekly award by passported status and by local authorities are provided in the supplementary tables.

3.3 Average weekly awards by age and family type 

Figure 19 shows the average weekly income forgone estimates by age group. There has been an increase in most age categories except under 25s and 35 to 44 in March 2024. The under 25 age category had the lowest average weekly award at £14.74 which was also the lowest average weekly award in March 2023. The average weekly income forgone estimate is higher at each age category until the 55 to 59 category is reached at which point it decreases.

Figure 19: The majority of age groups have seen increases in their average weekly award

Average weekly award by age group, comparison of March 2023 and March 2024, Scotland

Figure 20 shows the average weekly award by family type in March 2024. There were increases in family categories with no child dependents since March 2023. It can be observed that couples generally have a higher average weekly award than single adults. Single adults with no child dependents received the lowest average weekly award at £15.48 compared to couples with dependent children who had the highest average weekly award at £21.50.

Figure 20: Households with no child dependents have seen increases in their average weekly award

Average weekly award by family status, comparison of March 2023 and March 2024, Scotland