Council tax plan could 'reduce' help for poorest

A local authority’s plan to overhaul its Council Tax Reduction Scheme (CTRS) could lead to its poorest residents being required to pay more towards their bill.

Durham County Council plans to make changes to its Local Council Tax Reduction Scheme (CTRS), which currently allows low-earners to apply for a discount of up to 100% off their bill.

Reform councillor Nicola Lyons said the current scheme was one of the “most generous in the country” and the council was considering capping discounts as part of cost-saving efforts.

Debt charity StepChange said it could not comment on specific policies, but it did not believe “reducing support for the poorest is the answer” to council funding pressures.

Richard Lane, the charity’s chief client office, said: “StepChange has called for the government to increase funding for council tax support to ensure councils can continue to offer residents with the lowest incomes 100% reductions.

“Ultimately, unaffordable council tax bills lead to counter-productive debt collection and enforcement that harms the worst off and leads to higher health and social costs linked to problem debt.”

The council said it was considering holding a consultation on four possible options for the CTRS scheme.

The first would allow residents to apply for a discount of up to 100% off their bills, depending on their income.

The remaining options would require residents to pay a minimum of 10%, 20% or 25% of their full bill.

The county council said it was required to save £45m by 2028-29 to balance its books and CTRS currently costs more than £60m a year.

It estimated the proposed change would save between £3.8m and £10.35m each year.

The current system also requires residents’ bills to be recalculated every time a change is made to their Universal Credit (UC) claim.

The council said last year the average UC claimant received 11 council tax bills, which cost the council £175,000 in printing and postage.

Reform UK recently took control of the authority and promised to carry out a Elon Musk-style review into “wasteful spending”.

Lyons said the county has “one of the most generous council tax support schemes in the country”.

“The changes to CTRS we are looking to consult on, would ensure we can continue to provide this much-need support, while taking into account the increasing financial pressure local councils are under,” she said.

“None of the potential changes would impact on pension-age households.”

If the council’s cabinet approves the consultation, it will be carried out between 16 July and 23 September.