Essex plans council tax cuts

Soldiers in Essex could be exempted from council tax

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People on low incomes, including junior military personnel, could be exempted from council tax to help them through the economic downturn as part of a radical package of support.

Council leader Lord Hanningfield (Con) has instructed Essex's finance department to investigate measures to take the pressure off low-paid workers and pensioners, with the county insisting the move can be funded from reserves.

In addition to council tax discounts, Essex is investigating a mass installation programme of renewable energy sources such as wind turbines and solar panels on all viable houses to help with the soaring cost of energy bills.

And the council could also take advantage of a slumping housing market to snap up cheap properties to kick-start development in the county.

"This is as much preventative as anything else as authorities will simply have to pick up the pieces - and of course the bill - from the impact of the credit crunch when it comes to increased repossessions and instances of fuel poverty," Lord Hanningfield told LGC.

Giles Roca, Essex's head of media and marketing, admitted any scheme would depend on securing the support of Essex's districts. He said discussions were likely to be concluded by Christmas.

"Our reserves are in a relatively healthy financial position," he said. "Our finance people are looking at the proposal. Once we have a firmer idea of how this would work, we would have a discussion with our districts."

The Ministry of Defence gives military personnel a 25% council tax rebate to all overseas troops. Mr Roca said Essex could extend the scheme to give all military households a full exemption from council tax.

He said the council would need to undertake a thorough analysis of the spread of incomes within the county, but confirmed it aimed to implement the scheme in time for the next round of council tax bills in April.

Tony Travers, director of the Greater London Group at the London School of Economics, raised concerns that giving exceptions and discounts to some low earners could create fresh poverty traps for those excluded from the cuts.

But he added: "Local government exists to come up with these creative solutions. I see no reason why district councils, county councils and London boroughs should not come up with this kind of initiative, provided it is lawful."

Hillingdon LBC earlier this year revealed it was freezing council tax bills for pensioners for three years. Kent CC's  attempts to limit rises for older people failed following doubts about the plan's legality.

A spokeswoman for the Department for Communities & Local Government said: "Local authorities have the flexibility to grant council tax reductions or exemptions, either to individuals or groups of council tax payers.

"Councils are best placed to know how best to use this power."