Government & Public Sector

Client Context

A local authority needed to evaluate the effectiveness of a council tax reduction scheme that had been in place for three years. They had administrative data on 42,000 households, including council tax payments, benefit claims, employment records, and demographic information. The evaluation was required by the Ministry of Housing, Communities and Local Government to inform national policy.

The Challenge

The scheme was not randomly assigned — households self-selected into the programme based on eligibility criteria that correlated with outcomes. Simple before-and-after comparisons would confound the scheme's effect with economic trends. The authority needed a causal estimate of the programme's impact on employment outcomes and council tax arrears, with robustness checks suitable for policy review.

Our Approach

We used a regression discontinuity design (RDD) exploiting the sharp eligibility threshold based on income bands. Households just above and just below the cutoff provided a credible counterfactual. We estimated local average treatment effects using both parametric and non-parametric approaches, with bandwidth selection following the Imbens-Kalyanaraman method. We also conducted a difference-in-differences analysis as a complementary strategy, using similar households in a neighbouring authority as a comparison group. All analyses were conducted in Stata with reproducible do-files.

Results

The RDD estimated that the scheme reduced council tax arrears by £127 per household per year (95% CI: £82 to £172) and increased employment probability by 3.2 percentage points (95% CI: 0.8 to 5.6). The DiD estimates were consistent in direction though slightly smaller. The robustness checks — including placebo thresholds, donut-hole specifications, and covariate balance tests — all supported the main findings. The evaluation was submitted to MHCLG and contributed to the national evidence base on council tax support schemes.

Client Testimonial

"The statistical rigour of this evaluation gave us real credibility with central government. It was exactly the kind of evidence-based analysis they were looking for."

— Head of Policy, Riverside Borough Council

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