Consultation and Surveys
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DCC Consultation on changes to the Council tax reduction scheme
Council Tax Reduction (CTR) is financial help to pay Council Tax for anyone who is on a low income. Since April 2013, we have had to create our own Council Tax Reduction Scheme for people of working age.
The current scheme helps over 32,000 working age households in County Durham costs £41.3 million annually for Council Tax reductions
Over the past 12 years, we have had one of the most generous schemes in the country. Like most councils, we are under huge financial pressures, and we must look at everything we offer to find ways to reduce costs. On top of the £270 million in cuts made to our budget since 2011, a further £69.252 million must be saved for the period 2025/26 to 2028/29 to balance the budget.
Changes since the scheme was introduced:
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Most working age people have been moved onto Universal Credit (UC).
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There are now more working-age claimants compared to pensioners.
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The number of pensioners claiming is the lowest in 12 years.
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After a rise during the Covid-19 pandemic, the number of working age claimants is now at its lowest level since 2013.
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Even though fewer people are claiming, the cost of the scheme has gone up because Council Tax bills have increased.
Administration costs have also gone up due to the move to UC. This is because the number of admin tasks related to CTR has gone from 169,000 to 191,000 in just two years. This could rise to over 250,000 tasks by 2026.
Why we are considering changes
On average, someone on UC gets 11 different Council Tax bills a year, a new bill has to be issued every time their circumstances change.
This means people experience frequent changes to their CTR award making it more difficult to budget, they experience problems with direct debits due to the frequency of changes. For us, this means higher administration costs due to higher printing and postage costs and more staff time to manage changes due to the increasing number of tasks that we have to do each year.
Proposals
We’re suggesting a new income banded system that would start on 1 April 2026 for the new Council Tax year. The changes would only affect working age people.
We are keen to understand your views about four options for a new system:
Option 1a: Income Banded CTR Scheme with no minimum contribution
Options 1b – 1d: the same Income Banded CTR Scheme but with minimum contributions to the Council Tax bill of 10%, 20% or 25%.
For each option, we would replace the current complicated calculation of the amount of ‘earnings disregard’ for different types of households such as couples, people with disabilities, carers, lone parents etc, with a new standard ‘earnings disregard’ of £10 per week.
To see examples of how this would work in practice and to give your views on the proposals visit https://www.letstalkcountydurham.co.uk by Friday 26 September 2025.