Council Tax reduction in Scotland: 2018-2019

3. Weekly Income Forgone Estimates

CTR caseload and Income forgone are reported quarterly 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 for each local authority and benefit type for the given month. When a households CT liability is reduced due to the CTR scheme, it reduces the amount of Council Tax a local authority can collect. The CTR scheme therefore reduces the amount of CT a local authority can expect to receive, although the Scottish Government provides funding to each local authority to reflect their CTR income forgone. The total CTR weekly income forgone for Scotland was £6.4 million in March 2019. Local authority figures for January to March 2019 are given in Table 3.

Table 3: CTR weekly estimate of income forgone (£000's) by Local Authority, January to March 2019 ^{1, 2, 3}

Notes:

¹ Recipients are as at monthly count date. See Methodology Notes, Section 2 for more details. Available at http://www.gov.scot/Topics/Statistics/Browse/Local-Government-Finance/Methodology/Ctaxreductionmethod

² Weekly income forgone estimates are based on 'number of recipients multiplied by average weekly reduction' for each local authority and benefit type for the given month.

³ Figures are rounded to the nearest £100. Components may not sum to total due to rounding.

3.1 Weekly income forgone over time

The total weekly income forgone estimates for Scotland have decreased from £7.1 million in April 2013 to £6.4 million in March 2019. Income forgone estimates follow the same general pattern as the number of recipients, with the exception of April 2017 and April 2018 where there was a large increase in the income forgone over the previous month whilst the number of CTR recipients decreased. The reasons for this are due to the changes to CT and CTR introduced in April 2017 listed on page 1 of this publication and increases in CT in April 2018.

All local authorities have seen a decrease in their weekly estimates since April 2013, with the exception of Aberdeenshire whose weekly estimates of CTR income forgone has increased by just under £5,000. Furthermore, the number of CTR recipients and weekly income forgone have been closely linked, with most of the change in income forgone being driven by changes in the number of recipients. Chart 9 shows the month-on-month percentage changes in the number of recipients and the weekly income forgone for April 2013 to March 2019. So, rather than a sustained increase in income forgone, the chart spikes up in April 2017 and April 2018 due to changes in CT and CTR referenced above and local authorities being given the power to increase Council Tax by up to 3% in these financial years. After the increases in CT, the month-on-month comparisons decrease and follow previously observed patterns.

Chart 9: Month-on-month percentage change in CTR recipients and weekly estimates of income forgone in Scotland, April 2013 to March 2019

The Caseload and Income Forgone tables, also published with this publication, show an increase in the on-going costs of the scheme due largely to CT increases.

Other factors that affect the value of total income forgone by local authorities include, age, structure of the population and household income. Chart 9 also shows small peaks in number of recipients and weekly income forgone at the beginning and middle of each calendar year, indicating a possible seasonal effect.

In October 2018 the number of recipients fell by 2.3%. The months of September to December 2018 saw the roll out of UC to several large local authorities including Glasgow, Edinburgh and Aberdeen. People in those areas (with some exceptions) were no longer able to make new claims for legacy benefits, such as Income Support, Employment and Support Allowance, Job Seekers Allowance, and Pension Credit (Guarantee Credit). Unlike legacy benefits, UC does not passport recipients to full CTR. It is likely that the roll out of UC has contributed to this fluctuation in caseload and income forgone with change in recipient numbers increasing or decreasing with a monthly lag before income forgone follows the trend.

The weekly income forgone estimate for each local authority for each month between April 2013 and March 2019 are provided on the web in the Caseload and Income Forgone tables.

3.2 Average weekly awards by passported status

In March 2019, the average weekly award per CTR recipient was £13.49 per week. Average weekly award per recipient varied by both local authority and passported status; these figures are included in the supplementary tables.

Non-passported recipients who were in employment received the least on average per week at £11.14, compared to those on Income Support who received the most at £15.10. Passported income forgone will generally be higher as, by virtue being on a passporting benefit, these recipients will all be in receipt of full CTR. Chart 10 shows the average weekly award per recipient by passported status.

Chart 10: Average weekly award per recipients by passported status, March 2019

3.3 Average weekly awards by age and family type

Chart 11 shows the average weekly income forgone estimates by age group in March 2019. The under 25 age category had the lowest average weekly award at £12.21 followed by the 25 to 34 age group at £12.87.

Chart 11: Average weekly award by age group, March 2019

Chart 12 shows the average weekly award by family type in March 2019. Single adults with no child dependents received the lowest average weekly award at £12.78 compared to couples with dependent children who had the highest average weekly award at £17.26.

Chart 12: Average weekly award by family status, March 2019