Warwickshire County Council is set to ask North Warwickshire Borough Council to justify plans to allow its poorest working-age residents to not pay any council tax.

As collecting authorities, Warwickshire's district and borough councils control policies on the council tax reduction schemes that help people on benefits or with limited incomes, reviewing them annually.

Rules for pensioners are set nationally.

Nuneaton & Bedworth Borough Council and North Warwickshire Borough Council are currently consulting on schemes for the financial year beginning in April 2027 and the county has prepared a joint response to both.

Nuneaton & Bedworth plans to maintain an 85 per cent maximum for help, meaning that all working-age people responsible for council tax will have to find 15 per cent of their bills.

Over the border in North Warwickshire, the maximum reduction is currently 91.5 per cent, and it is proposed that this be increased to 100 per cent, meaning some residents will be lifted out of paying council tax altogether.

The county has declared itself "concerned" by that prospect.

Their submission reads: "While recognising the importance of protecting residents facing the greatest financial hardship, a scheme with no minimum contribution may weaken the connection between local taxation and payment responsibility, create a sharp cliff edge as household income increases and potentially reduce incentives to increase earnings where doing so results in council tax becoming payable."

The county adds that it would "welcome evidence that these behavioural and collection risks have been considered" and advocates "analysis of whether a modest minimum contribution, supported by a well-targeted hardship scheme, could achieve a more appropriate balance between affordability, fairness and incentives".

While plans to merge Warwickshire's councils are currently on hold, the county also references the potential for both areas to be covered by the same council – and council tax rates – in the near future.

One of the key changes proposed by both Nuneaton & Bedworth and North Warwickshire is a move towards income banding – instead of the councils recalculating discounts for claimants every time their incomes fluctuate, the council plans to place households into income bands.

Those changes are estimated to reduce the overall council tax collected in Nuneaton & Bedworth by £134,667, while the tweaks alongside the 100 per cent help for some are expected to reduce collection by £239,000 in North Warwickshire.

"Greater clarity" has been requested on why neighbouring authorities with "broadly comparable communities", including Rugby Borough Council, have different maximum awards, income bands and household thresholds.

"The final decision-making reports should compare the proposed arrangements with those operating elsewhere in Warwickshire and with relevant national practice, explain the rationale for material differences and demonstrate that the chosen parameters appropriately balance claimant support, affordability and collection performance," the draft submission continues.

And despite being "broadly" supportive of efforts to simplify income banding in assessing claims, the county argues it is "entirely inappropriate to introduce materially different arrangements".

"This could create avoidable complexity and require schemes to be revisited shortly afterwards," it states.

"Warwickshire County Council therefore suggests that the three existing northern billing authorities use this opportunity to work together to achieve greater alignment and harmonisation now, or at minimum explain clearly why differences are necessary and how they could be addressed through the reorganisation process."

The response has been drafted by financial professionals at Warwickshire County Council but is subject to political sign-off from deputy leader and portfolio holder for finance and property Cllr James Crocker on Friday (October 16).