Cornwall Council’s plan to tax the very poorest in the county to help fill a council tax black hole has been branded “obscene” by Secretary of State Eric Pickles.

The council says that the Government announced earlier this year that local authorities would be required to create their own localised council tax support schemes as part of the changes to the national benefits system and at the same time councils were told that the funding for the scheme was being cut by 12.5 per cent. This means that Cornwall faces a shortfall of £6 million at a time of increasing pressures on its budget if it does not make changes to the existing scheme.

Around 53, 815 people in Cornwall currently claim council tax benefit. Under the current means tested scheme people can claim up to 100 per cent of council tax benefit. As the Government has said that pensioners must be protected from a reduction in benefit, any change will affect around 26,729 working age people.

The council says that after considering a range of options, including continuing with the existing 100 per cent scheme and reducing the level of maximum help available to 70 per cent, members of the cabinet have “reluctantly” agreed to support a recommendation that all working age recipients of council tax benefit to pay an additional 25 per cent contribution towards their council tax.

“While we recognise that this recommendation will cause difficulties for some people in Cornwall, the stark truth is that the council does not have the money to pick up the bill for this” said Council Leader Jim Currie.

“We also feel strongly that it is inappropriate to ask local taxpayers to subsidise the national welfare system and so, reluctantly, have no choice but to support the proposal to reduce the maximum entitlement to council tax benefit to 75 per cent”.

However Mr Pickles has said that making people on very low incomes pay struck him as “obscene”, adding: “I thought it was a singularly unambitious scheme, just taxing people who are in receipt of council tax benefit rather than helping them get into work, dealing with mistakes and fraud."

He added: "Their job is not to tax the poor. It's to help the poor.”

He also raised the prospect of ordering councils not to impose council tax charges on the unemployed.

The council says that it was carrying out “detailed research to identify the groups which would be most affected by this proposed change”, with Mr Currie saying that officers were working closely with the Citizens Advice Bureaux and the voluntary and independent sector to ensure that information and advice support was provided to the most vulnerable people. The authority is also developing an exceptional hardship fund to support people in the greatest need.

Members of the Cabinet also agreed to monitor the impact of the new scheme and the welfare reforms in general in Cornwall and to provide regular reports to the Government.

The recommendations from the Cabinet will be considered at the meeting of the full Council on January 13, when the final decision will be made.