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Council Tax: Students

Volume 487: debated on Monday 2 February 2009

To ask the Secretary of State for Communities and Local Government what arrangements are in place for her Department to review (a) provision for student discounts on council tax and (b) the manner in which local authorities with student populations are compensated in respect of the discount. (252299)

Communities and Local Government keeps the legislative framework governing council tax under continual review, including the provisions for student discount disregards and exemptions.

The distribution of Formula Grant takes into account the relative needs and relative resources of each authority, relative to all other authorities providing the same services. There is also a central allocation and the floor damping mechanism.

The relative resources component reflects the authority's potential to raise income through council tax. For multi-year settlements, this is measured by projections of the council tax base.

The council tax base is the number of Band D equivalent properties. The number of dwellings in each band is calculated by taking the number of dwellings on the valuation list and adjusting for various exemptions and discounts.

For the 2008-09 to 2010-11 settlement, the projections of the tax base were calculated using the tax base as at the 8 October 2007 and then applying the average annual increase between October 2005 and October 2007.

The projections of council tax base used in the calculation of the 2008-09 to 2010-11 settlements also reflect an adjustment for student exemptions. This adjustment uses the average of student council tax exemption numbers from counts as at 31 May 2007 and 8 October 2007, rather than using a count solely as at 8 October 2007.

We are continuing to discuss with local government how to best reflect student exemptions in these projections for the next three-year settlement.