House of Commons Library

Council Tax Reduction Schemes

Published Thursday, September 21, 2017

This House of Commons Library Briefing Paper provides information on the implementation of local Council Tax Reduction Schemes since 1 April 2013. These local support schemes have replaced the national scheme of Council Tax Benefit.

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The abolition of Council Tax Benefit

As part of the 2010 Spending Review the Coalition Government announced its intention to localise support for Council Tax from 2013/14 and to reduce expenditure on this benefit by 10%; representing a saving of £414m for central Government excluding implementation costs.

The Welfare Reform Act 2012 provided for the abolition of Council Tax Benefit (CTB). Provisions for the localisation of Council Tax support were included in the Local Government Finance Act 2012.

Since 1 April 2013 local authorities in England have been responsible for administering their own Council Tax Reduction Schemes subject to the Council Tax Reduction Schemes (Prescribed Requirements) (England) Regulations 2012 (SI 2012/2885). Some authorities chose to adopt the default scheme provided for in the Council Tax Reduction Schemes (Prescribed Requirements and Default Scheme) (England) Regulations 2012 (SI 2012/2886). Separate regulations apply in Scotland and Wales.

Localisation was accompanied by a switch from Annually Managed Expenditure (AME) to Departmental Expenditure Limit (DEL) funding with a 10% reduction against forecast expenditure for 2013/14. The Government used its regulation making powers to mandate that pensioners in receipt of Council Tax Benefit at April 2013, and future pensioners, would be no worse off under schemes introduced by local authorities. This has led to the charge that the funding cut has fallen disproportionately on people of working-age.

Implementation of local schemes of support

We have now entered the fifth year of Council Tax Reduction schemes – research shows that of 326 coucnils, only 37 have not changed the level of support available since 2013. 277 councils have reduced the amount of support available by requiring minimum payments or through band caps, 12 have made alternative changes such as removing the second adult rebate. 

Government review 2016

The Local Government Finance Act 2012 placed a requirement on the Government to conduct a review of all local Council Tax support schemes within three years of the Act taking effect. The review was launched on 2 December 2015 and was led by former council leader and Member of Parliament Eric Ollerenshaw OBE.

The review was published on 8 April 2016 and praised local councils for successful implementation of schemes. However, it highlighted inefficiencies in the current structures, including the need for annual review of the schemes. It also recommended further devolution, including at least part of the prescribed scheme for pensioners, as well as academic research into the impact of localising support on recipients. 


Background on the proposal to localise this support and attempts to amend the legislation as it progressed through Parliament can be found in Library Briefing Paper 06101, Localising Support for Council Tax – background.

Commons Briefing papers SN06672

Authors: Wendy Wilson; Chris Murphy

Topics: Housing, Housing benefits, Local government, Working age benefits

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