Lambeth plans to cut tax support scheme by 20% in bid to balance budget

Lambeth council is proposing to cut its tax support scheme by 20 per cent in a bid to balance its budget.

The local authority is calling on residents to give their views on the proposal as part of a consultation. Subject to the feedback, the changes would be introduced on April 1, 2025.

The plans, which would change Lambeth’s Council Tax Support (CTS) scheme, would affect 8,000 people in the borough.

To meet rising pressures during the pandemic and the cost of living crisis, Lambeth council offered 100 per cent council tax relief to residents.

Maintaining the CTS at this level has cost the local authority £28.3million each year.

The council has now proposed to reduce the maximum level of CTS by 20 per cent. 

The change means that somebody who currently has 100 per cent of their council tax paid by the council would have to pay 20 per cent of their council tax bill from April 2025.

The proposed change would not apply to every household that receives council tax support.

Of the 24,000 households receiving council tax support, 16,600 – including  8,300 pensioners – would be unaffected by the change due to them being in a protected group.  

The council is also proposing “discretionary protection” 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.

Cllr David Amos, Lambeth’s Cabinet Member for Finance, said: “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.

“We will continue to do all we can to protect the service people rely on, but this will not be easy.”

Lambeth’s government funding has reduced by 34 per cent in real terms since 2010.

The unprecedented demand for services including temporary accommodation means the council needs to save £69million over the next four years.

Cllr Amos said: “Local government services are at breaking point following fourteen years of central government austerity, rising inflation and demand for public services.

“Due to the demand crisis 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.”

Alongside proposed cuts to the CTS, the council has introduced action to tackle its own overspend, including reviewing all recruitment and non-essential spend, ending agency placements, and consultancy and advisory contracts.

The public consultation is now live and will run until February 10, 2025. 

Residents can view full details of the proposals and have their say at: Council Tax Support Scheme 2024 Survey

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 early next year.

Subject to the feedback, the new scheme would be introduced on April 1, 2025.

Pictured top: Lambeth council HQ (Picture: Robert Firth)