Guidance

Council tax rebate: allocation methods

Updated 16 March 2022

Applies to England

Summary

1. This document describes the methodology for allocating funding for the Council Tax Rebate. The fund comprises the following elements:

• The Council Tax Rebate: Under the main scheme, billing authorities are expected to provide a one-off £150 payment to all chargeable dwellings and dwellings in exemptions classes N, S, U and W, which are valued in council tax bands A to D (or have an alternative valuation band of band D as a result of the disabled band reduction scheme.) Empty and second homes are excluded. The specific criteria are set out in paragraph 11 of the published scheme guidance. This is estimated to cost £2.93 billion.
• The Discretionary Fund: In recognition that billing authorities may wish to provide support to households who are not eligible under the terms of the main scheme, councils will receive a share of a £144 million discretionary fund.

The Council Tax Rebate Scheme

2. Funding for the Council Tax Rebate will be reconciled against spend based on the eligibility criteria in the published guidance. Any overfunding of grant to billing authorities will be required to be paid back to government and any underfunding will be settled with billing authorities following the reconciliation.

3. Upfront funding will be allocated based on 2021 Council taxbase data as follows for each billing area:

i. First, sum all chargeable dwellings in bands A to D, the estimated number of dwellings in bands A to D that are in exemption classes N, S, U and W and the number of dwellings in band E that are in receipt of the disabled band reduction scheme.

ii. Next, subtract the number of empty and second homes in bands A to D, which are not eligible for the discount.

iii. Multiply this number by the dwelling growth factor (1.0063), and then round to the nearest whole number to give the total estimated eligible dwellings.

iv. Finally, multiply the total estimated eligible dwellings by £150, to find the total up front funding allocation for each billing authority area.

4. Further details of this calculation can be found in the appendix and all data for this calculation is sourced from the 2021 Council Taxbase Statistics.

5. A 0.63% uplift has been applied to account for dwelling growth, because there are not forecasts at the billing authority level.

6. After accounting for this, the estimated cost stands at £2.93 billion. Individual billing authority allocations for the main Scheme are available in the allocations spreadsheet.

7. As per the guidance, eligibility will be determined based on the position on 1 April 2022 and therefore funding will not exactly match actual expenditure. The department will run a reconciliation exercise later in 2022 against actual expenditure.

Discretionary Fund

8. The discretionary fund will be apportioned based on the Index for Multiple Deprivation (IMD) and estimated number of LCTS claimants in bands E to H, using 2021 Council Taxbase Statistics and LCTS Claimants Live Tables.

9. To carry this out:

i. Take the average total IMD score for each billing authority. Rounded figures (to 3 d.p.) are published in File 10 of the English indices of deprivation 2019. Rounded figures will not fully match the allocations for all authorities. To calculate unrounded numbers follow the methodology in Appendix N of the technical report.

ii. Multiply this by the sum of the populations of the Lower-Layer Super Output Areas (LSOA) that make up that billing authority area as given in File 6: Population Denominators following the link above. This gives a population weighted IMD score.

iii. Take the population weighted IMD score for each billing authority and divide it by the population weighted IMD for England (calculated by the same method). This is the IMD allocation factor.

iv. Next, calculate the estimated number of LCTS Claimants in Council Tax bands E to H using 2021 Council Taxbase Statistics and LCTS Claimants as recorded at Quarter 3 in the Live Tables as at 16/02/2022. Details of how to do this can be found in the appendix. Data is available separately for working age (WA) and pension age (PA) schemes.

v. Use the estimated number calculated at step iv. to calculate the proportion of the England total that each billing authority area makes up. This is the LCTS allocation factor.

vi. Multiply the IMD factor by 0.6 and the LCTS factor by 0.4 and sum these together to calculate the proportions on which the discretionary fund will be allocated.

vii. Multiply the percentage allocations calculated by £144 million and round these numbers to the nearest £150 to find the overall allocation of the discretionary fund for each billing authority area.

10. This method leads to a total fund of £144,000,600. The 4 billing authorities which had been rounded up by the largest amount will instead be rounded down to the next multiple of 150, so that the overall fund does not exceed £144 million. These 4 billing authorities are: Bromley, Folkstone and Hythe, Hammersmith and Fulham, and Wigan.

11. Billing authorities will be required to repay to government any unspent money from the Discretionary Fund at the end of November 2022. As above, this fund will be allocated based on data in the CTB statistics and LCTS Claimants live table as at 16/02/2022. We do not intend to revisit the allocations in the event of scheduled or unscheduled revisions to the data sources.

Appendix

Billing authority areas are referred to in calculations as ‘lower tier local authorities’ (LTLA)

Non-discretionary element – detailed calculation

Allocation _LTLA (£) = £150 × Estimated eligible dwellings_LTLA

Where

Estimated eligible dwellings_LTLA = (Chargeable dwellings_{Bands A-D,LTLA}

+ Estimated Dwellings_{Bands A-D,Exemption classes N,S,U and W,LTLA}

+ Dwellings in receipt of disabled reduction_{band E,LTLA}

- Empty homes_{Bands A-D,LTLA} - Second homes_{Bands A-D,LTLA)} × 1.0063

Rounded to the nearest whole number.

and

Estimated dwellings_{(Bands A-D,Exemption classes S and U)} = Exempt dwellings_{(Bands A-D, LTLA)} x Exempt dwellings_{(Classes N,S,U and W, LTLA)} /Exempt dwellings_{(Total, LTLA)}

and

Exempt dwellings_{(Bands A-D, LTLA)} Is the total number of Exempt dwelling in Council Tax bands A-D in each LTLA.

Exempt dwellings_{Classes N,S,U and W, LTLA} Is the total number of dwellings in Exemption Classes N, S, U and W in each LTLA.

Dwellings in receipt of disabled reduction_{(band E,LTLA)} Is the total number of dwellings in Council Tax band E in receipt of the disabled band reduction scheme.

Exempt dwellings_{Total, LTLA)} Is the total number of exempt dwellings in each LTLA in all Council Tax bands and Exemption Classes

All of these figures can be found in the 2021 Council Taxbase Statistics.

Discretionary element

Allocation_LTLA (£) = Allocation_LTLA (%) × £144,000,000

Allocations for 305 LTLAs were rounded to the nearest £150. Four authorities (Bromley, Folkstone and Hythe, Hammersmith and Fulham and Wigan) will receive allocations rounded down to the nearest £150.

Where

Allocation_LTLA (%) = 0.6× (IMD x Population)_LTLA / (IMD x Population)_England

+0.4 × Estimated LCTS Claimants_{Bands E-H,LTLA} / Estimated LCTS Claimants_{Bands E-H,England}

IMD_LTLA Is the average total IMD score for each LTLA. Where an LTLA has undergone a restructuring since 2019, the average total IMD score can be calculated using the guidance in appendix N of the IMD Technical Report.

Population_{LTLA<\sub> Is the total population in each LTLA sourced from the IMD dataset in paragraph 13.}

Estimated LCTS Claimants_{PA,Bands E-H,LTLA} = LCTS Claimants_PA,LTLA x LCTS Taxbase Reduction_{PA,Bands E-H, LTLA} / LCTS Taxbase Reduction_{PA,Total, LTLA}

Estimated LCTS Claimants_{WA,Bands E-H,LTLA} = LCTS Claimants_WA,LTLA x LCTS Taxbase Reduction_{WA,Bands E-H, LTLA} / LCTS Taxbase Reduction_{WA,Total, LTLA}

Estimated LCTS Claimants_{Bands E-H,LTLA} Estimated LCTS Claimants_{PA,Bands E-H,LTLA} + Estimated LCTS Claimants_{WA,Bands E-H,LTLA}

Where

LCTS Claimants_PA,LTLA Is the total number of Pensioner Age Council Tax Support Claimants in each LTLA as found at Q3 in the LCTS Claimants Live Tables as at 16/02/2022.

LCTS Taxbase Reduction_{PA,Bands E-H, LTLA} Is the Taxbase Reduction in Council Tax bands E-H in dwelling equivalents due to Pensioner Age Council Tax Support Claimants for each LTLA.

LCTS Taxbase Reduction_{PA,Total, LTLA} Is the Taxbase Reduction in all Council Tax bands in dwelling equivalents due to Pensioner Age Council Tax Support Claimants for each LTLA.

LCTS Claimants _WA,LTLA Is the total number of Working Age Council Tax support Claimants in each LTLA as found in the LCTS Claimants Live Tables as at 16/02/2022.

LCTS Taxbase Reduction_{WA,Bands E-H, LTLA} Is the Taxbase Reduction in Council Tax bands E-H in dwelling equivalents due to Working Age Council Tax Support Claimants for each LTLA.

LCTS Taxbase Reduction_{WA,Total, LTLA} Is the Taxbase Reduction in all Council Tax bands in dwelling equivalents due to Working Age CT Support Claimants for each LTLA