Thousands of residents to receive cost of living payment but rents will go up

By Adrian Zorzut, Local Democracy Reporter

A town hall has approved a one-off £100 payment for residents struggling with cost-of-living pressures, while proposing to up the council tax rate by 4.99 per cent.

Kensington and Chelsea council’s leadership team unanimously approved the move during a meeting on Wednesday of last week.

Councillor Johnny Thalassites, the cabinet member overseeing the proposal, said the funds are expected to help 16,500 households and will be handed out in May as a single, one-off payment.

He said: “Many households in this group are going to be finding things tough and whilst this won’t necessarily solve the problem in one go, my goodness it will help lots of them.”

Households receiving council tax relief, housing benefits or Universal Credit payments could be eligible for the payment, according to a council report.

A separate report shows the council is also seeking to increase council tax for the 2024/25 financial year by 4.99 per cent, including a 2 per cent increase on the adult social care precept.

The payment comes as income inequality has been made worse by the cost-of-living crisis and where the poorest 20 per cent of households in London faced inflation rates 1.8 times higher than the richest 10 per cent of households, according to Trust for London.

A report by the council read: “Kensington and Chelsea is home to some of the most deprived households in the country, as well as some of the most affluent. The 2019 Index of Multiple Deprivation (IMD) clearly shows this polarisation, which is particularly acute in relation to household income.

“Although some of the most acute cost-of-living pressures (particularly in relation to inflation and energy costs) have lessened since the height of the crisis in 2022/23, many households in the borough continue to struggle with the cost of living”.

The council said median weekly household earnings dropped by 16 per cent between 2021 and 2022, from £977 to £813. This comes as the number of households earning 60 per cent below the national average increased by 542 to 7,052, from pre-cost-of-living times.

The payments are expected to cost the council approximately £1.65million and will come from its Cost of Living reserve.