Consultation is being proposed on suggested changes to a council tax reduction scheme.
Durham County Council is proposing changes to its Local Council Tax Reduction Scheme (CTRS) to ensure it is easier to understand and fairer for all applicants, and to reduce mounting administration costs.
The scheme was introduced in 2013 and offers eligible working age residents discounts of up to 100% on their council tax bills.
Next week, the council’s cabinet will hear how the scheme has operated under the same model since 2013 and is one of the most generous in the country, supporting more than 32,000 households.
However, national welfare reforms have significantly changed the benefits system during that time, and this has resulted in the scheme becoming increasingly complex, costly to administer and confusing for claimants.
Durham County Council is one of the few local authorities in the region to offer residents up to a 100% discount on their council tax bill.
A key factor in why the current model is proving increasingly challenging is the transition from legacy benefits to Universal Credit.
Under Universal Credit, the Department for Work and Pensions recalculates the amount a claimant receives each time their circumstances change, even if this change is minor.
The council is then notified and is required to recalculate CTRS, resulting in multiple council tax bills being issued throughout the year.
In 2024/25, an average of 11 council tax bills were sent to CTRS claimants on Universal Credit.
In the last year (2024/25), the council processed 190,254 changes in circumstances for CTRS claims, incurring printing and postage costs of more than £175,000, in addition to further officer time to process these changes.
With the transition to Universal Credit accelerating as the government’s 2026 deadline approaches, it is anticipated the number of changes will increase to more than 250,000 in 2025/26.
In response to these challenges, Cabinet will be asked to agree to a public consultation this summer to gather residents’ views on four potential new ways to operate the scheme for working age residents from April 2026.
Each option is based around the introduction of an income banded scheme, which is the approach many local authorities have taken following the move to Universal Credit.
The four options are:
• 1a: An income banded CTRS, with support of up to 100 per cent still being made available to working age residents
• 1b: An income banded CTRS, with a maximum of 90 per cent of the bill being covered by the CTRS and a minimum of a 10 per cent contribution from all working age residents to their council tax bill
• 1c: An income banded CTRS, with a maximum of 80 per cent of the bill being covered by the CTRS and a minimum of a 20 per cent contribution from all working age residents to their council tax bill
• 1d: An income banded CRTS, with a maximum of 75 per cent of the bill being covered by the CTRS and a minimum of a 25 per cent contribution from all working age residents to their council tax bill
Under each of these options, the council would remove the current complex calculations and replace them with income bands, meaning that minor changes to a claimant’s circumstances would not impact on their CTRS entitlement.
This would simplify the process, avoid multiple bills being issued and provide an opportunity to make savings in the administration of the scheme.
Three of the options also include a proposal to introduce a minimum council tax contribution for all working age households to help the local authority meet the huge financial pressures it is facing and result in all working age households having a financial stake in the council’s services.
The council will also consider circumstances where minimum contributions, if applied, may not be applicable, such as those diagnosed with a terminal illness and how wider discretionary support can be provided in these instances.
In February, a report to the council identified that the authority had had to deliver £289 million of savings since 2010 in order to balance its budget, and that a further £45 million needed to be saved by 2028/29.
The CTRS currently costs more than £60m a year and the introduction of minimum contributions could reduce this by between £3.8m and £10.35m a year.
Cllr Nicola Lyons, Durham County Council’s Cabinet member for stronger communities and belonging, said: “County Durham has one of the most generous council tax support schemes in the country in terms of working age households, helping thousands of our most vulnerable residents each year.
“It’s just one of the ways we help vulnerable and low-income households, with our Welfare Assistance Scheme and Household Support Fund also providing vital support to people in need.
“The introduction of our free school meals auto-enrolment programme resulted in almost 2,000 more families saving hundreds of pounds on food costs over the current academic year.
“We also work closely with other public and voluntary sector organisations to tackle deprivation in our communities.
“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.
“None of the potential changes would impact on pension age households. However, before any decisions are made, it’s important we find out what people think, and a consultation would provide the opportunity for us to gather residents’ views.”
If approved, it is proposed the consultation would run from Wednesday, July 16, to Tuesday, September 23.
To find out more about the support Durham County Council offers residents, visit www.durham.gov.uk/benefits
