Plans by a local authority to revise its Council Tax Reduction Scheme (CTRS) could result in increased financial burdens for its most vulnerable residents.
Durham County Council is considering changes to its CTRS, which currently provides eligible low-income individuals with discounts of up to 100% on their council tax bills.
Reform councillor Nicola Lyons stated that the existing scheme is among the “most generous in the country,” and the council is exploring capping discounts as part of broader cost-saving measures.
While debt charity StepChange refrained from commenting on specific policies, it asserted that “reducing support for the poorest is not the answer” to the financial challenges faced by councils.
Richard Lane, Chief Client Officer at StepChange, emphasized: “StepChange has advocated for increased government funding for council tax support to enable councils to continue offering 100% reductions to residents with the lowest incomes.”
“Ultimately, unaffordable council tax bills lead to counter-productive debt collection and enforcement, disproportionately affecting the most vulnerable and contributing to higher health and social costs associated with problem debt.”
The council has indicated it is contemplating a consultation on four potential options for the CTRS scheme.
The first option would maintain the current system, allowing eligible residents to apply for discounts of up to 100% based on their income.
The alternative options would require residents to contribute a minimum of 10%, 20%, or 25% of their full council tax bill.
Durham County Council faces a budget shortfall requiring £45m in savings by 2028-29. The CTRS scheme currently costs over £60m annually.
The proposed changes are estimated to generate savings ranging from £3.8m to £10.35m per year.
The current system also necessitates recalculating residents’ bills each time there is a change to their Universal Credit (UC) claim.
The council reported that, last year, the average UC claimant received 11 council tax bills, incurring £175,000 in printing and postage costs.
Reform UK, which recently gained control of the authority, pledged to conduct an “Elon Musk-style review” to identify and eliminate “wasteful spending.”
Lyons emphasized that the county has “one of the most generous council tax support schemes in the country.”
“The proposed changes to the CTRS, which we are looking to consult on, would ensure we can continue to provide this much-needed support, while also addressing the increasing financial pressures faced by local councils,” she explained.
“None of the potential changes would affect pension-age households.”
If approved by the council’s cabinet, the consultation will be conducted between July 16 and September 23.
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