Major changes to Liverpool council tax bills

Bills are sent for over 240,000 council tax accounts across the city amounting to more than £303m with more than a third of households receiving financial support. This comes to around £73m a year. Since its inception more than a decade ago, Liverpool Council’s support scheme has not been updated.

Ahead of the local authority setting its annual budget for 2025/26 and the Labour government continuing with the policy of allowing councils to increase rates by 5% each year without a referendum, officials are to look at how the scheme can be amended to be fit for purpose and meet the needs of communities. Cllr Ruth Bennett, deputy leader and cabinet member for finance, told a committee of councillors how changes would allow the system to target in a more fair way and support those most in need.

Under the current scheme, a Liverpool resident liable for council tax could get up to 100% of their charge paid through the scheme if they are a pensioner, care leaver or Foster carer or up to 91.5% of the charge paid if they are of working age. Liverpool’s current council tax support scheme (CTSS) is means tested, based on old council tax benefit rules, making it very complex and difficult to understand.

The scheme does not enable households to budget for income changes and is costly to administer for the city. As part of the design review, officers considered how it could be improved for residents in receipt of Universal Credit (UC).

A report to finance and resources committee members said: “It was concluded that it would be appropriate to align Liverpool’s scheme with UC to improve automation opportunities and draw on the assessment work carried out by Department of Work and Pensions to minimise costs and reduce the need for additional information to be supplied by support recipients.”

A total of four options are to be considered by the city before a formal decision is made ahead of the budget being adopted in March 2025. These include retaining the existing system, a net earnings banded scheme, limited changes with means testing or a net earnings banded scheme with household composition.

Cllr Bennett said: “It’s a realignment so it’s trying to make the system fairer, targeting those who are most in need and in lower banded properties.” The Belle Vale ward member said the current system “has flaws” including “an uncertainty, an unfairness and a lack of dignity” for people receiving multiple council tax bills.

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