Proposed council tax changes

Residents exempt from paying council tax in County Durham are set to lose full support from a discount scheme, writes Local Democracy Reporter, Bill Edgar.

Proposed changes to the Local Council Tax Reduction Scheme (LCTRS) mean the region’s poorest residents would make a 10% contribution to their bills. 

The Durham County Council proposals also include the introduction of an income-banded system.

The scheme was introduced in 2013 to offer eligible working-age residents discounts on their council tax bills and currently supports 31,200 claimants. The current uncapped system means 84% of claimants have no council tax charges to pay. 

The means-tested LCTRS considers an individual’s household, income, capital, and personal circumstances to establish an applicable amount, which is then compared against the person’s actual income.

Durham County Council said the proposed changes will ensure all residents contribute to the cost of services provided by the council. The authority warned that a move to a banded scheme is becoming “increasingly necessary” following the acceleration of Universal Credit migration. 

Changes to the scheme would also avoid multiple bills being issued and provide an opportunity to make savings in the administration of the scheme.

However, rival politicians warned the tax rise would impact the county’s poorest residents. 

Andrew Cowan, a chronically ill former counter-terrorism firearms officer, pleaded with council bosses not to remove his “lifeline” council tax benefits, which he said would leave him “struggling to live”. 

The 51-year-old said: “If I have to pay council tax again, I don’t know what I’ll do. Bills are going up no matter what, so I need the 100 per cent relief. If I had to pay even a percentage, it would impact my daily life. I would struggle to live without the support.”

A public consultation, which ran between July and September, received 1,856 responses. Around 30% of respondents said the support should remain at 100%, with the majority in favour of a 75% cap being introduced. 

The overall cost of the scheme has risen from £52.4 million in 2023/24 to around £66.2 million in the current year.

Durham County Council’s cabinet is due to approve the proposals on November 19 ahead of a final decision at a full council meeting in December. 

The proposed changes: 

• Implement an income-banded Local Council Tax Reduction scheme for working-age residents from April 1, 2026

• Reduce the maximum level of support available to working-age residents from 100% to 90%  

• Cease the provision of council tax support for working-age residents in the form of Second Adult Rebate

• Apply one set rate for non-dependant deductions, at £10 per week, for each non-dependant regardless of their earnings

• Reduce the maximum capital limit for working-age residents from £16,000 to £10,000

The proposed changes come as the authority faces a budget deficit of £72.8 million, with £19 million of this falling into 2026/27.

Councillor Darren Grimes, deputy leader, said: “The unavoidable cost pressures we face are driven by nationally determined factors and from nationally set legislative requirements, over which we have no control.

“We have made a strong case for additional funding, so we hope that the government does indeed deliver on this promise to fix the foundations because, as things stand, we are facing an uncertain financial outlook for the council, which is necessitating very difficult decisions on service cuts versus council tax increases.”