New Forest District Council scraps proposal to change minimum amount low income households pay towards council tax

A U-TURN has seen plans to remove a minimum 10% contribution requirement to council tax by low income households scrapped.

As reported in the A&T the proposals, which are part of an annual review ahead of any changes from April 2025, moved a step closer when they were backed at a meeting of the council’s cabinet last Wednesday.

However, following a removal of the proposal by the council’s main scrutiny panel, the Conservative-run council backtracked on Monday, voting 25 to 14 in favour of retaining the charge – which brings in an overall cost to precepting authorities of £297,000.

This was despite recommendations by a task and finish group to remove the charge on the most hard-up households. There were also three abstentions.

An amended proposal, submitted by the Lib Dems, asked for the minimum charge to be removed. This was lost by 22 votes to 19, with one abstention.

There are currently 7,868 residents receiving council tax reductions. Of these, 4,213 are working age and 3,655 are of pensionable age.

A report to members explained: “Currently, any award of council tax reduction is based on 90% of the council tax liability – unless vulnerable, in which case it is based on 100% of the council tax liability – so there is a minimum contribution of at least 10% to pay.

“The proposal was, subject to consultation, to remove the 10% minimum contribution so that any award of council tax reduction is based on 100% of the council tax liability.”

A task-and-finish group supported this plan, the report explained, as it was noted that many claimants have been hit by the increase in the cost of living, in particular fuel and food inflation.

Discussing the proposal, Lib Dem Cllr Jack Davies said at the meeting: “I find it very upsetting that the council might go against what the task and finish group said, in order to be cruel for the sake of being cruel.

“We’re getting an increase of £2m per year from the second homes premium so it is something we can easily afford [to support].”

Fellow Lib Dem Cllr Caroline Rackham agreed, adding: “What a time of year to pick this particular topic – we can’t somehow find the money for these people who are so vulnerable?

“This is putting a whole load of people into poverty further than they need to be.”

Cllr Jeremy Heron, the cabinet member for finance and corporate, defended the decision, adding: “A loss of income for the council is a loss for the precept authorities across the district.

“I see nothing wrong in asking people to support the services for which they receive a benefit, if they can, albeit at a slightly reduced rate because of their circumstances.”

The task and finish group also discussed capping any council tax reduction at band D households, which raised “concerns” from Hampshire County Council about any changes that would make the scheme more generous and therefore impacting on its income.

NFDC is set to introduce new council tax premiums from April 2025 for long-term empty properties, which includes reducing the length of time a 100% premium can apply from two years to one, and a 100% premium for properties which are furnished and periodically occupied, commonly referred to as ‘second homes’.