Somerset Council is bringing forward proposals which protect its 100% Council Tax discount for working age residents on the lowest incomes, while also making savings to help balance its budget for next year.

In preparation for the creation of Somerset Council in 2023, a new Council Tax Reduction (CTR) scheme was adopted which brought in a 100% Council Tax discount across Somerset for the first time for most of the county.

In November 2023, as part of a number of measures to find savings in response to the financial emergency, Somerset Council agreed to a review of CTR for 2025/26.

CTR is a discount offered for Council Taxpayers on low incomes. The proposed changes would only apply to working age adults – the support provided for people of state pension age would not be affected as it is mandated by Government.

The initial changes proposed would have saved the council around £12.1m a year. However, many of these proposals, such as those which protect carers and disabled residents, were removed by the council’s Executive in July this year.

A public consultation was then held to seek views on changes which could have saved up to £6m by reducing the level of discounts on offer.

Following feedback from the public and the council’s Scrutiny process, the revised proposals now being considered would help the council save £3.9m a year. These include:

• Protecting the 100% discount offered to working age adults on the very lowest incomes, while reducing the other discount bands to 50%, 25% and 10%.
• Continuing the current system of exempting certain income, such as that from disability benefits, carers allowance and child benefit, as well as the first £25 of employment income from the income calculations.
• Retaining the policy of providing a discount to care leavers, foster carers and special guardians (but funding it from the Exceptional Hardship scheme).
• Reducing the discount by £10 per week for each non-dependent adult living in a property.
• Limiting the discount available to the maximum available for a band D property.
• Reducing the period of backdating claims to 1 calendar month.

Following last year’s decision to increase the scheme’s income thresholds in line with the CPI rate of inflation (6.7%) the Council is also proposing to increase the income thresholds by inflation this year.

Cllr Liz Leyshon, Somerset Council’s Lead Executive Member for Resources, said:

We have had to consider many heartbreaking decisions in response to the financial emergency and there are few more difficult than this.

However, with our budgets continuing to remain under extreme pressure, we have a duty to look across all areas of spending to find savings, however difficult and unpalatable they may be.

We’ve listened to the public feedback and have taken steps to protect many of the discounts on offer. We are committed to supporting our most vulnerable residents and that is why we are proposing to keep the 100% discount for those most in need and working to ensure our residents receive the maximum support to which they are entitled.

The Council is also looking at how best to use the Government’s Household Support Fund and the Council’s own Exceptional Hardship Scheme to assist those who may be worse off as a result of any changes, and how to ensure all Somerset residents are claiming all of the benefits and financial support to which they are entitled.

The proposals will be debated at the Corporate and Resources Scrutiny meeting on 25 November and Executive on 2 December, before a final decision is made by Full Council on 18 December.