Plan for complete cut to council tax for poorest households to be put to peninsula residents
By Siobhan Middleton (local democracy reporter)
4th Oct 2022 | Local News
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A plan to cut council tax completely for the poorest households in Babergh will be put to the public on the Shotley peninsula and beyond later this month.
Babergh cabinet voted to start a period of consultation on a temporary maximum council tax reduction scheme for working age people of one hundred per cent.
Lib Dem councillor David Busby, cabinet member for assets and investments at Babergh, said: "Anything where you can get a benefit that is paid for by efficiency is good news.
"Increasing the maximum from 95 per cent to 100 per cent is good for people in need, and simplifying the universal credit scheme should do this. It will also make it cheaper for us to administer."
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Consultation is expected to run between October 13 and November 24 this year, and people liable for council tax will be able to comment – as well as bodies supporting people with debt problems and landlords.
Peninsula district councillor Derek Davis, who represents Ganges ward, was part of the Overview and Scrutiny Committee that also week made recommendations to Babergh's cabinet, which sat on Monday.
He welcomed the move and added: "Administering the current council tax scheme leads to administrative costs that outweigh the money gained from people paying five per cent council tax.
"There is also the complication of needing monthly reviews as the incomes of people receiving universal credit fluctuate.
It can be confusing situation which costs us in officer time, printing costs and postage costs.
"Then there is the recovery process itself, which can lead to costs higher than the amount gained.
"This change is logical. Given the additional financial pressure everyone is experiencing with inflation, it is also timely."
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A decision is expected by February 20, 2023, at the latest – ready for the new scheme to be implemented in April 2023.
The scheme approved for consultation was the one recommended by officers, out of four possible options. It includes a maximum possible reduction of one hundred per cent for people who get legacy benefits or universal credit, with measures to prevent people on universal credit from falling through the cracks.
Legacy benefits are the separate benefits, including jobseeker's allowance and housing benefit, incorporated into one through the universal credit system that started in 2013.
Rather than reviewing eligibility for the full council tax cut every month as earnings fluctuate, the route chosen proposes an automated system based on department for work and pensions (DWP) data.
As the automated system could lead people just-about-eligible for the reduction to fall through the cracks, the option chosen also adds a 'transitional protection scheme'. According to the report, transitional protection would be given to approximately 314 people, and would leave no one eligible for the reduction financially worse off.
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