5. CTR impact on Council Tax income
When a local authority reduces a household's Council Tax liability under the CTR scheme, it reduces the amount of Council Tax income it would otherwise be able to collect. Any reduction in Council Tax income, therefore represents a reduction in the funding available to local authorties for providing services 2. The CTR scheme, like CTB, therefore represents a cost which is publicly funded.
In Scotland in 2016-17, the total gross Council Tax billed, before CTR, was £2.47 billion and the provisional income foregone on CTR was £321.6 million. This means that total reductions through CTR accounted for around 13 per cent of total Council Tax billing. 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 under a quarter of households are only eligible for 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 (
Issued before local authorities accounts' are audited and so collects provisional, unaudited values for the total reductions under CTR.
Local Financial Returns (
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 2013-14, 2014-15, 2015-16, and 2016-17 by local authority. In 2013-14, based on final, audited figures, the CTR scheme reduced Council Tax income by a total of £359.7 million. This figure reduced in 2014-15 to £343.8 million; 2015-16 to £332.2 million and the provisional, unaudited figures of £321.6 million for 2016-17 show a further decrease. These figures represent a decrease of almost 11 per cent in the total value of reductions in Scotland between 2013-14 and 2016-17. This is in line with the decrease in the number of recipients.
All local authorities have seen a decrease in the total value of reductions due to CTR between 2013-14 and 2016-17. The largest percentage decreases were seen in Edinburgh and East Lothian (14 per cent), with Stirling, East Ayrshire, Shetland and Eilean Siar at about 13 per cent.
Table 4: Total reductions in Council Tax income through CTR scheme (£ millions) by local authority, 2013-14 to 2016-17
|2013-14 a||2014-15 a||2015-16 a||2016-17 b|
|Argyll and Bute||5.8||5.6||5.3||5.1|
|Dumfries and Galloway||8.9||8.6||8.3||8.1|
|Edinburgh, City of||27.7||26.5||24.9||23.8|
|Perth and Kinross||6.9||6.5||6.3||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 Receipts ( CTRR).