Dip in Council Tax collection rates causes concern

A dip in Council Tax collection rates has raised concerns that Powys County Council could lose out on millions of pounds, at a time when every penny counts.

At a meeting of council’s Finance Panel on Monday, July 8 councillors received a report on the council’s budget performance during 2023/2024.

The good news for the council is that the council finished 2023/2024 with a surplus of £2.3 million on their base budget of £326.621 million,

Out of that total budget, £109.7 million comes from Council Tax revenue paid for by the residents of Powys.

The report notes that the in-year Council Tax collection rate for the year was 96.75 per cent which is below the council’s target collection rate of 98.1 per cent.

This is also a drop from the 97.2 per cent collection rate recorded in 2022/2023.

Conservative Cllr Pete Lewington said: “There’s a bit of a downward trend.

“Have we done any work to understand why we’re not achieving 100 per cent and what we could do to make sure we get 100 per cent.

“I guess that would be a big chunk of money.”

Finance Panel chairman and Conservative group leader Cllr Aled Davies pointed out that each percentage point of Council Tax roughly equates to £1 million.

Director of corporate services Jane Thomas explained that the council had not necessarily collected all the due Council Tax by the end of the financial year.

Ms Thomas said: “That collection is still ongoing, and the debt recovery continues.

“We expect to get much closer to the 100 per cent by the end of that collection period.

“But at this point of the year the collection rate is slightly down on what we have reported in previous years and it’s something we have seen nationally.”

She added that collection rates are still “quite high” and extra support has been given to the debt recovery team.

Ms Thomas said: “We have also invested some grant funding we received through the Shared Prosperity Fund in two additional money advice officers to support our residents when they are finding it more difficult to manage. ”

The council has five of these money advice officers that provide budgetary advice and find out whether a resident who contacts them can claim any benefits or allowances.

Ms Thomas added there were also Council Tax reductions schemes also available for residents who are eligible.

Finance portfolio holder, Labour’s Cllr David Thomas: siad “It should not come as a major surprise due to the cost of living crisis that our residents have had to endure for the last few years.”

Cllr Lewington asked how the Council Tax shortfall would be funded?

Ms Thomas explained that any “under recover” would need to be managed from within the total budget position.

Comments from the Finance Panel are expected to be added to the report which will go on to a meeting of the Cabinet at the end of the month.