Croydon Council proposes cuts to tax support scheme
Changes could affect 19,000 low-income and disabled residents, with potential reductions in maximum discounts.
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More than 19,000 low-income and disabled Croydon residents could face increased council tax bills under proposed cuts to the borough’s council tax support scheme. The changes, which would align Croydon's support with neighbouring boroughs, are part of efforts to find between £3.6m and £12m in annual savings. Executive Mayor of Croydon Jason Perry stated that the council must consider these changes due to ongoing financial challenges. The proposals aim to make Croydon's support scheme less generous than those currently offered in outer London boroughs such as Bromley, Enfield, and Harrow.
Impact on specific groups
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Under the proposed changes, non-working disabled claimants could see their maximum council tax discount reduced from 100% to 50%. Official figures indicate that nearly half of all current working-age support claimants in Croydon, 49.6%, receive a disability benefit. Single parents with children under five may also experience a reduction in maximum support, from 80% to 50%. For general working-age claimants without disabilities, the maximum support could fall from 75% to 50%.
The council is also considering lowering the property band cap for support from Band D to Band C. This would mean residents in higher-banded homes would receive less assistance. If implemented, these changes would cap total council tax support at 50%, making Croydon's scheme among the lowest in London. The council currently spends approximately £39m annually on council tax relief, with £25m allocated to working-age residents.
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These proposals are being considered as Croydon Council undergoes a 'Best Value' intervention, mandated by government-appointed commissioners overseeing the council's financial stabilisation efforts. Croydon Council voted to increase council tax by 4.99% in April, which included a 2% levy for adult social care. However, finance officers have warned that the proposed higher council tax bills for low-income households could reduce the council tax collection rate from 98% to 97%.
Consultation and next steps
Croydon Council is seeking feedback on potential mitigations for the proposed cuts, including an expanded hardship scheme for up to two years to provide transitional protection. Executive Mayor Jason Perry emphasised the need to ensure the right support is provided to those most in need, noting that Croydon's current scheme is more expensive than many other London boroughs. Croydon Labour Leader Stuart King commented that the consultation must be comprehensive and meaningful, with a full equalities assessment of each option presented to councillors. If Cabinet approves the proposals on September 23, a statutory six-week consultation will commence. A final decision is expected from Full Council in February 2027, ahead of implementation in April 2027.
Questions this report answers
+How many residents could be affected by the proposed council tax support cuts?
Over 19,000 low-income and disabled residents in Croydon could be affected by the proposed changes to the council tax support scheme. These changes aim to reduce the council's annual expenditure on this support.
+What are the proposed reductions in council tax discounts?
Non-working disabled claimants could see their maximum council tax discount reduced from 100% to 50%. Single parents with children under five may experience a drop from 80% to 50% support. General working-age claimants without disabilities could see their maximum support fall from 75% to 50%.
+What is the timeline for these proposed changes?
If approved by Cabinet, a statutory six-week consultation will take place. A final decision is expected from Full Council in February 2027, with any implemented changes scheduled to take effect in April 2027.
+Why is Croydon Council proposing these cuts?
The proposed cuts are part of Croydon Council's efforts to find between £3.6m and £12m in annual savings. These measures are being taken as the council faces financial challenges and is under government intervention to stabilise its finances.
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