Council tax support for thousands of families could be cut due to funding shortfall

The council tax reduction scheme (CTRS) helped 35,000 households on low income across the borough in the last financial year.

The amount of money from the Government grant to help administer the scheme is being reduced, meaning the authority faces having to find millions itself.

It currently costs £25.5m but it is estimated the level of cash it receives will be £17.8m for 2015/16 - a shortfall of around £7.7m.

Options include reducing CTRS from between 10 to 25 per cent or recovering the reduction in grant from other council efficiencies. Council bosses are to carry out a consultation over the best way forward.

A report from Mushtaq Hussain, project lead for money, home and jobs, said: "In 2013/14 Walsall's means tested CTRS helped 35,000 households on low income meet their council tax liability.

"The supported households were split between 15,271 pensioners and 19,676 working aged customers.

The report added: "If the scheme continues to be fully funded for 2015/16, assuming current workloads continue and there is no increase/decrease in demand, the ongoing cost would be £25.5m.

"It is estimated that the council would only receive circa £17.8m of funding to support the scheme, therefore the council would be providing £7.7m of its own funding to continue with the current scheme.

"The council's overall financial outlook is of course highly challenging. The latest projections are that there is a gap of over £85m for the council to address over the next four years.

"Any decision on the council tax reduction scheme will have an impact on other requirements for financial savings."

Council leader Sean Coughlan said they wanted to be as open and transparent with residents as possible and were faced with less support from the Government, who had initially provided cash to cover most of the initiative.

"If we want to maintain the level of support we have given people we need to find £7.7m," he said.

"It has put more pressure on local authorities to cover. We need people to understand what the implications are."

Bosses are listening to the feedback received during the consultation and carrying out a full equality impact assessment.

A final recommendation will go to the council at a meeting in December.