Around 26,000 of the neediest people in County Durham will have to start paying council tax next year as the county council scraps 100% rebates for people of working age. About 2,400 others who already pay some council tax will lose part of their rebate.
More than 24,000 of those affected will pay up to £5 a week and more than 3,000 will pay between £5 and £10. Women and the disabled will be disproportionately affected but pensioners and the terminally ill will be protected.
Some of the most deprived areas of the county are among those with the heaviest concentrations of residents affected, including areas in and around Stanley, Seaham, Peterlee, Brandon and Consett. These are also places that elected Reform councillors in May.
Reform-controlled Durham County Council’s cabinet decided on 19 November to revise its local council tax reduction scheme (LCTRS) for the poorest residents of working age for the first time since it was introduced in 2013. The maximum rebate, at present uncapped, is being cut from 100% of their tax bills to 90%, meaning everyone will pay something.
A report to the cabinet by Paul Darby, corporate director of resources, Councillor Darren Grimes, deputy leader, and Councillor Nicola Lyons, cabinet portfolio holder for communities and civic resilience, says:
“At 1 October 2025, the council had approximately 31,200 working age LCTRS claimants, at an estimated annual cost of £41.3mn. The majority of these claimants, 84% [26,208], currently receive 100% support and therefore have no financial stake in or make any contribution to the cost of services provided by the Council.” The pension age scheme, not affected by the changes, costs £24.9mn.
Other North East councils
The move brings Durham closer into line with other councils in the North East, though in recent years there has been a trend among councils nationally towards uncapped rebates. The Durham move will bring in an extra £2.161mn annually, helping to plug the £70mn black hole in the council’s finances described in NEB here.
The LCTRS is a means tested support scheme where an individual’s household, income, capital (savings) and personal circumstances are all taken into account. It is closely aligned to the former Council Tax Benefit system and the existing Housing Benefit system.
Now that claimants are being transferred to Universal Credit, the LCTRS scheme is becoming inefficient and costly to administer. With people’s circumstances sometime changing every month, the annual cost to the council of printing and postage alone is estimated at £175,000.
Durham’s new scheme
Durham is introducing an income banded scheme, which it says is common among councils. A claimant’s entitlement will represent a percentage of their total bill depending on which band their circumstances and income results in them falling into.
The new scheme will also remove the second adult rebate (which offers a 25% council tax reduction under certain conditions if a second adult is living in the property), reduce the limit on the savings a claimant can have from £16,000 to £10,000 and introduce a fixed rate of £10 a week for each non-dependent, regardless of earnings.
South Tyneside, Hartlepool, Stockton and Middlesbrough have income banded schemes. Newcastle, Sunderland and Stockton allow claims up to 100%; other councils in the region impose caps, the tightest being in Darlington, where the maximum rebate is 80%.
What the people think
The decision to revise the LCTRS was taken following a consultation in the summer which attracted 1,856 individual responses. There was 65.8% support for an income banded model. The highest proportion of respondents, 36.2%, favoured setting the cap at 75%, while 30.2% thought it should stay at 100%.
The cabinet decision will go the full council meeting on 10 December for approval.
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