Westminster City Council is the latest London borough to consider slashing its council tax support (CTS) scheme in order to plug its funding gap.
Depending on the level of a reduction, the proposal could generate between £147,000 and £817,000 per year in additional income for the council.
Westminster is one of seven London councils which currently offers qualifying residents 100 per cent council tax relief. However this soon could change, with consultation set to launch on proposals which could see this support cut by between 10 and 30 per cent for those of working age.
The Central London authority has said it is considering the cuts ahead of a £100mn reduction in funding from the central government, as part of the Fairer Funding Review.
Cabinet member for finance, Councillor Paul Fisher, rubber-stamped a decision to launch a consultation on the proposals at the start of this month.
Westminster has been transparent with residents that a council tax rise is looming. The Central London borough isn’t the only council implementing cuts to council tax discounts, with similar proposals having already been approved in the last 18 months in Kensington and Chelsea, Croydon, and Barking and Dagenham.
Wandsworth Council is also reviewing its council tax reduction scheme while planning a hike in council tax of 94 per cent.
Westminster’s Council tax support scheme currently costs it £13.68mn per year in lost revenue, with over 15,600 people claiming CTS. Most of the claims are by people of working-age (9,437) — made-up of those with limited capacity to work (6,580), households with children (3,935) and single parents (1,985).
If approved, someone living in a Westminster Band D property in receipt of CTS would need to contribute between £2.01 and £6.03 per week towards council tax where previously they may have paid nothing.
The executive director of finance and resource said that the council’s current scheme of 100 per cent council tax support makes Westminster an “outlier”.
His report added: “Given the significant reduction in central government funding and continuing pressures on its finances, the council must consider all available options to ensure its long-term financial sustainability and protect the delivery of essential services.
“This includes reviewing the council tax support (CTS) scheme for working-age claimants to ensure that all available resources are targeted effectively and support for the most vulnerable residents is maintained.”
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