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Council's tax rebellion sets collision course with ministers

LABOUR leaders at the North-East’s biggest council are on a collision course with the Government, after guaranteeing benefit payments against Coalition spending cuts.

Tory ministers want town halls to respond to Council Tax reforms, set to come into effect in April, by cutting benefits for working-age claimants.

But, despite facing unprecedented cutbacks which could top £200m by 2018, Durham County Council today (Wednesday, January 9) agreed to protect payments to its council tax benefits claimants at current levels for the next 12 months.

Councillors were today warned the change could make County Durham a haven for “benefit tourists”, but they pressed ahead with the Local Council Tax Support Scheme (LCTSS), thought to be the first of its kind in the region and possibly the country.

Richard Bell, the Conservative group leader, welcomed the move and slammed his own Government’s reforms, saying he had never seen any such change quite so unwelcome.

He told today’s full council meeting at Durham’s County Hall that the LCTSS was a very pragmatic approach, but added that he had severe doubts where it was sustainable.

The measure will be paid for by cutting council tax discounts on empty and second homes and charging 150 per cent council tax on properties which have stood empty for more than two years.

Some councils, such as Hambleton, in North Yorkshire, have already reduced or axed such council tax discounts.

The LCTSS will come into effect in April and be reviewed after the first year.

Don McLure, the council’s corporate director of resources, said “careful monitoring” would be needed, in case the number of benefit claimants increased.

But, he added, without the scheme some of the most vulnerable people would see their annual council tax bills rise by £250.

The LCTSS is Durham’s response to Government moves to localise council tax from April and cut the grants by which council tax benefit is paid by ten per cent – which will leave Durham County Council with a £4.6m shortfall.

Councillor Bell asked today’s meeting whether the scheme left the county vulnerable to so-called benefit tourism – with claimants moving to Durham to get more benefits than offered elsewhere.

“Is there a danger of more people coming in to take advantage of it?” he asked; and called on the council to work with its neighbours to combat the risk.

Alan Napier, the council’s deputy leader, said the authority would take his concerns on board.

Benefit tourism could increase due to the “bedroom tax”, which will see council tax benefit reduced for people living in council or housing association accommodation who have spare bedrooms.

Around 50,000 North-East households could be affected, with many families forced to move out.

But many more could be forced out of wealthier areas in the south – potentially moving to the North, where living costs are cheaper, particularly if benefit payments are higher.

County Durham has almost 5,000 empty homes, 1,800 of which are considered ‘long-term empty’.

However, Monica Burns, North-East manager for the National Housing Federation, said benefit tourism to County Durham was “very unlikely”.

“Moving is an upheaval. People have children in schools, employment, family and friends," she said.

“It’s costly and the accommodation isn’t available – there’s a huge shortage.”

Ms Burns welcomed Durham’s LCTSS, saying: “In times of austerity, people’s budgets are very stretched and any help they can get from whatever source is very valuable. I think it’s a very good decision.”

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