Support for low income earners as council agrees to 100 per cent discount on Council Tax

Families on low incomes, including those in work, in West Suffolk are set to benefit from a 100 per cent discount on Council Tax for a year to help tackle cost of living challenges.

West Suffolk Council agreed the change following a consultation which backed the reduction to provide tailored and local support for those most in need.

It is part of a range of ways the council is supporting communities including those with the highest risk of financial hardship as a result of the current cost of living crisis. Information and support can be found on West Suffolk Council’s web pages at Cost of living (westsuffolk.gov.uk)

The meeting also heard how the government announced it has increased the limits councils can set Council Tax at. This is because it expects authorities nationally to increase Council Tax to help meet the funding challenge caused by high energy and fuel costs. However, despite increasing costs to the council to deliver services the meeting also heard that in light of the challenges faced by West Suffolk communities the intention remained to stick to the current lower Council Tax increase plans, which were discussed and included in the council’s medium term plans in February.

In light of the national challenge of the cost-of-living West Suffolk Council engaged with the public and stakeholders on options to temporarily change the Local Council Tax Reduction Scheme for a year.

The options include increasing the discount from the current capped 91.5 per cent (where those eligible pay a minimum of 8.5 per cent of their Council Tax) to either 95 or 100 per cent (where those eligible would pay a minimum of five per cent or none of their bill). Some 70 per cent of respondents to the consultation agreed or strongly agreed with the proposal to increase the maximum discount on Council Tax.

The average working age recipient of the Local Council Tax Reduction Scheme (LCTRS) receive up to an additional £103 discount on their Council Tax for the single year.

The proposal is highly targeted to reach those who are already on means-tested benefits, many of whom are working, and have low administrative cost. This could benefit around 4,700 residents and represents a one year only £500,000 investment by organisations that set Council Tax precepts in supporting those most in need that meet the criteria.

The cost to the council would be worked through the 2023 to 2024 budget setting process.

By providing additional support to residents the aim is to help avoid crisis situations, for example, homelessness and fewer applications for Exceptional Hardship Payments from those in receipt of Council Tax support.

This is a short-term measure for the financial year 2023-2024 only. After this period West Suffolk Council’s LCTRS would revert to the current minimum 8.5 per cent contribution rate.

Sarah Broughton, deputy leader and portfolio holder for Resources and Property for West Suffolk, said: “There is a range of activities and support that we have been delivering to help our communities during these challenging times. In Suffolk there is tremendous joint work going on in which West Suffolk is playing its part to aid people facing this cost-of-living crisis. This review by West Suffolk Council of the Local Council Tax Reduction Scheme is part of the authority’s work to aid those considered most in need whilst recognise that so many households are affected by the current cost of living crisis. The engagement shows support not only from residents but from Suffolk County Council as a major preceptor. I am pleased that this was supported by council to help those need it most.”

Government announced in the Autumn Statement that councils were expected to increase Council Tax due to reduced funding and financial challenges. This recognised the funding pressures caused by the national cost of living crisis, inflation, fuel bills and the Ukraine war on the delivery of council services.

To help meet these expectations government increased the Council Tax levels that councils could ask for. Council Tax is used to help fund services but only covers 20 per cent of the cost of delivering them. West Suffolk’s share of the overall Council Tax bill is around 10%, the majority of the council tax goes to Suffolk County Council.

Despite this expectation by the government for a greater rise in Council Tax the meeting was told that currently the council would not change its medium-term plans and stick to the lower Council Tax level increase discussed in February.

So, while the government would have expected the authority to raise Council Tax by nearly three per cent to £5.58 a year – West Suffolk Council are looking to stick to its agreed medium term financial plans of a raise of £4.95 – which is just under 10p a week for a Band D property. At this point this is clearly an indication as the budget goes through the normal process and debate during the New Year.