This Council Motion comes from Newcastle Liberal Democrats. It calls for fairer reimbursement to councils for the exemption that students receive from council tax.
The formula to reimburse councils has been fixed for over a decade during which time inflation, council tax rates and student numbers have all risen. This has left councils with large student populations with council tax funding gaps of millions of pounds, as shown by these examples from Newcastle and Bristol.
The Government have assured that this gap will be addressed in the Fair Funding Review 2.0. However there is still a role for local councils, especially those with high student populations, to make sure the funding gap is comprehensively closed and the formula is flexible enough to keep pace with rising student numbers and council tax rises in the future.
This council motion is commits your council to playing a large role in the consultation process for the fair funding review. It is a pertinent motion to move in councils with large student populations.
Council notes that:
- The Student Class N Council Tax exemption is a national policy that helps to support the accommodation costs of full-time students during their studies.
- It receives some reimbursement from the DCLG via the Settlement Funding Assessment to compensate for the loss of Council Tax income, but that the student adjustment was fixed in 2013/14 and has not been updated since.
- With the rise in Council Tax rates since 2013/14 and growing student numbers, the funding gap between between the level of reimbursement councils receive and lost council tax revenue is increasing sharply. It can run into millions of pounds a year of lost income for councils with high student populations.
- In response to a recent parliamentary question, the Government has indicated that they intend to use the consultation on the Fair Funding Review 2.0 to review the adjustments to the funding formula for local authorities with higher student exempt properties.
Council believes that:
- The review of the funding formula is a welcome first step, but that local authorities with high student populations, like [AREA NAME], should not disproportionately bear the costs of student Council Tax exemptions.
- Students should continue to have the same access to Council services as all other residents and that the Class N exemption should continue.
Council resolves to:
- Participate fully in the consultation process on the Fair Funding Review 2.0, making the case for the funding gap caused by Class N exemptions to be filled and that future funding assessments should reflect changes in Council Tax rates and student numbers.
- Engage with similar authorities and others, locally and nationally, to jointly lobby the Government on this issue.