The council is considering changes to the Council Tax Support (CTS) scheme as part of wider efforts to balance its budget in the face of huge pressures on front-line services.
Lambeth’s core government funding has reduced by 34% in real terms since 2010, despite population increases, rising demand for social services and increased responsibilities from central government. The unprecedented demand for services including temporary accommodation means the council needs to save £69 million over the next four years.
To immediately take action to tackle the demand and cost of services such as temporary accommodation, Lambeth has introduced enhanced in-year action to tackle the overspend, including reviewing all recruitment and non-essential spend; ending agency placements, and consultancy and advisory contracts.
Lambeth increased support for many households to offer 100% council tax relief during the Covid-19 pandemic and the cost of living crisis, one of the most generous schemes in London. Despite limited resources, the council has maintained this level for as long as possible and invested an additional almost £4m since 2022 to a scheme that now costs £28.3m annually.
The council is therefore proposing to reduce the maximum level of CTS back to pre-covid levels, offering up to an 80% reduction in bills. The change would mean that somebody who currently has 100% of their council tax paid by the council and who doesn’t come under a protected category – such as pensioners, or those with a disability – would have to pay 20% of their council tax bill from April 2025.
The proposed change would not apply to every household that receives council tax support – pensioners and some working-age people would be exempt.
Word from the Cabinet
Cllr David Amos, Lambeth’s Cabinet Member for Finance, said the council was committed to providing the best possible financial support to the borough’s most vulnerable residents.
He said: “As part of the council’s cost of living support, we have supported over 27,500 households, reached over 9,000 of our most financially precarious residents with targeted pay-outs, supported vulnerable tenants with financial support towards their bills and communal heating costs, expanded Free School Meal provision, and brought in an additional £5.5m into the borough through unclaimed benefits and income for residents and schools.
“However, we need to make significant savings due to reductions in the amount of money we have to spend and rising need for our services. Local government services are at breaking point following fourteen years of central government austerity, rising inflation and demand for public services – meaning Lambeth must do more each year with less money, leaving us with a significant funding gap in the years ahead.”
Cllr Amos said that Lambeth, in common with many other councils, was considering reducing the maximum level of CTS scheme as one of several cost savings and revenue raising measures under consideration to reduce its significant budget gap. The proposed change would maintain the scheme as one of the most generous in London, and Lambeth would still have one of the lowest council tax rates in London.”
He added: “We will continue to do all we can to protect the service people rely on, but this will not be easy. Due to the demand crisis facing local authorities where the costs of providing statutory services are outstripping available funding, difficult decisions will have to be taken to balance the council’s books.
“This will mean tough decisions about every pound we spend, so that we can balance prioritising that money for those who need it most and keeping the council financially stable.”
The public consultation is now live and will run until Friday, 10 February 2025. Residents can view full details of the proposals and have their say at: Council Tax Support Scheme 2024 Survey
We estimate that of the 24,000 households receiving council tax support, 16,600 would be unaffected by this change due to them being in a protected group. Approximately 30% of households eligible for council tax support would need to pay at least 20% of their council tax bill.
The scheme currently provides statutory protection to approximately 8,300 pensioners, whose eligibility is determined by the national scheme. These people would be unaffected by any change to the Council Tax Support Scheme.
We are also proposing discretionary protection from the change for disabled applicants, carers, families affected by the overall benefit cap, war widows and widowers. Since 2018, those leaving care have been exempted from paying council tax until they are 25 years old, this would continue to apply.
Lambeth will also maintain our extra support for people in crisis, including our discretionary council tax support hardship scheme .
The findings of the consultation will be presented to Lambeth councillors, who will make the final decision on the future shape of the CTS scheme. The council will make a final decision early next year and any new scheme would be introduced on 1 April 2025.
