5. CTR impact on Council Tax income
When a household's CT liability is reduced, due to the scheme, it reduces the amount of CT income 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.
In Scotland in 2018-19, the total gross Council Tax charged, before CTR, was £2.765 billion and the provisional income forgone on CTR was £332.4 million. This means that total reductions through CTR accounted for over 12 per cent of total gross Council Tax. This is notably lower than the one-fifth of chargeable dwellings in receipt of CTR quoted in Section 4 due to two main factors. Firstly, just over a fifth of households receive partial CTR as discussed in Section 2.5. Secondly, as described in Section 4, the distribution of CTR recipients is heavily skewed towards the lower Council Tax bands with lower annual liability, and so lower CTR awards.
Information on the total value of all reductions under the CTR scheme is collected via two Scottish Government data collections:
- Council Tax Receipts Return (CTRR)
Issued before local authorities accounts' are audited and so collects provisional, unaudited values for the total reductions under CTR.
- Local Financial Returns (LFR)
Issued after local authorities accounts' are audited and so collects final, audited values for the total reductions under CTR.
Table 4 shows the total value of reductions for each year between 2013-14 and 2018-19 by local authority. The 2013-14 to 2017-18 figures have been the subject of audit. The 2018-19 figures are provisional. These figures represent a decrease of 8 per cent in the total value of reductions in Scotland between 2013-14 and 2018-19.
All local authorities have seen a decrease in the total value of reductions due to CTR between 2013-14 and 2018-19. The largest percentage decreases were seen in Na h-Eileanan Siar (20 per cent) and West Dunbartonshire (15 per cent) and Stirling (14 per cent). Details of the changes in income forgone are available on the Caseload and Income Forgone tables published with this report.
Table 4: Total reductions in Council Tax income through CTR scheme (£ millions) by local authority, 2013-14 to 2018-19
|2013-14 a||2014-15 a||2015-16 a||2016-17 a||2017-18 a||2018-19 b|
|Argyll and Bute||5.8||5.6||5.3||5.1||5.2||5.3|
|City of Edinburgh||27.7||26.5||24.9||23.8||24.7||24.7|
|Dumfries and Galloway||8.9||8.6||8.3||8.1||8.4||8.5|
|Na h-Eileanan Siar||1.6||1.5||1.4||1.3||1.3||1.3|
|Perth and Kinross||6.9||6.5||6.3||6.2||6.2||6.2|
a Final audited figures, published in Scottish Local Government Financial Statistics and available at: http://www.gov.scot/Topics/Statistics/Browse/Local-Government-Finance/PubScottishLGFStats
b These are provisional figures which are derived from information supplied by local authorities to Scottish Government on the statistical return Council Tax Collection Return, Quarter 4 2018-19 (CTRR).