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Residents who pay their council tax bill in one instalment at the beginning of the year are entitled to a 1.5% discount. The theory is that the council would then reinvest the cash at a greater rate of interest thereby deriving an income. However, with interest rates held at 0.5% since March 2009 and little prospect of an increase, the benefit of the scheme was questioned by Cllr Clarence Barrett (Cranham, RA) at last weeks Full Council meeting . Following his question requesting details of council tax forgone as a result of the discount, it emerged that, over the last three years, an average of 1,900 residents took advantage of the scheme resulting in a discount valued at £37,500 per year. Cllr Barrett said: “Given the very low level of interest rates which have been in place since 2009, what we can't have is a system where those who are fortunate enough to be in a position to pay their whole council tax bill in one go receiving a discount which is, in effect, being subsidised by all the other council tax payers. “As a result of raising this issue, I am pleased that the Administration has now agreed to review the scheme. “We need to demonstrate value for money, even with relatively small sums, so that all council tax payers are well served. For example, the £37,500 could be better used as additional support in caring for our elderly.” 25.11.11
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Discounts for paying council tax in an early lump sum are set to be reviewed after concerns over the financial benefits were raised at Full Council.