Agenda item

The Cabinet considered a report of the Corporate Director of Resources which set out the outcomes of the consultation and equalities impact assessment (EIA) of the proposals to make changes to the Council Tax premiums for empty homes and to introduce Council Tax premiums for properties classed as second homes, which are linked to the achievement of savings targets included in MTFP (14) and (where relevant to 2024/25) included within the 2024/25 tax base calculations.  The report sought to determine the council’s tax base for domestic properties liable to pay council tax and to report on the estimated council tax collection fund surplus / deficit as at 31 March 2024.  The report also incorporated the outcomes of the consultation on the proposal to reduce the Local Council Tax Reduction Scheme (LCTRS) grant payments to Town and Parish Councils by 50%, phased in over the next two financial years, linked to the achievement of savings targets included in MTFP (14) (for copy of report see file of minutes).

Councillor R Bell, Deputy Leader of the Council and Cabinet Portfolio Holder for Finance explained the importance of the report as part of the annual budget setting process, more so this year as the report contained the outcome of the consultation on changes to policies on long term empty properties, the introduction of a second homes premium from April 2025 and the outcome of the consultation on LCTRS grant payments to Town and Parish Councils.

Councillor R Bell explained that calculating and forecasting the tax base was complicated and required officers to make prudent assumptions about what will happen over the next 18 months, both in terms of the number and type of property mix across the county but also on who will occupy those properties.

Those calculations had been more complicated this year due to the need to model the impacts of the proposals to vary long term empty property premiums policies from April 2024.

The government’s Levelling Up and Regeneration Bill, which was passed into law in October, paves the way for local authorities to consider extra council tax charges on long term empty and second homes.

Given the position the Council found itself in, along with many other Council’s across the country it was only right that this option was explored.

Councillor Bell thanked the officers for undertaking the consultation and the analysis of that consultation in the report.

There was recognition from those taking part in the consultation that proposals would reduce numbers of empty properties and therefore increase availability of housing, including affordable homes. Respondents also acknowledged that the proposals would generate spending power which would assist in trying to balance the Council’s budgets.

It was pleasing to note that, inclusive of these policy changes, the Council Tax base used to calculate Council Tax next year showed an increase of 0.66% on the figure used to set the budget this year, and would allow £1.8 million of additional council tax revenues to be factored into budget planning.

Councillor Bell had referenced many times and lobbied Government about how the council suffered from a low tax base and therefore had limited council tax raising capacity compared to many other areas.

The report exemplified that very point given that 83.1% of all domestic properties across county Durham were in Bands A to C which was well above the national average of 65.4%. This placed the Council at a disadvantage compared to other authorities with higher proportions of properties in the higher council tax bands in terms of tax raising capacity.

Councillor S McDonnell, Cabinet Portfolio Holder for Digital, Customer Services and Procurement said that the Council needed to continue to lobby government to reform the unfair council tax system. It was a topic that had been debated from all sides of the Council Chamber on many occasions by all political groups and Councillor McDonnell looked forward to seeing a commitment from all political parties in their manifestoes for the next general elections. The commitment had been included in the North East Party Manifesto since 2014.

Resolved:

That the recommendations in the report be approved.