Croydon Council’s council tax support scheme costs around £39m per year, and is more generous than outer London boroughs like Bromley, Enfield and Harrow
More than 19,000 low-income and disabled Croydon residents could face increases in their monthly bills under proposed cuts to the borough’s council tax support scheme.
The proposed changes to the £39m-a-year scheme would leave Croydon with the joint-lowest level of council tax support — effectively discounts on council tax for eligible groups — in London if they are implemented in April 2027.
Mayor Jason Perry said the changes would align Croydon’s support with neighbouring boroughs, adding that it was “only right” to consider them as the borough continues to face financial challenges.
Under the proposals non-working disabled claimants face seeing their maximum council tax discount slashed from 100 per cent down to 50 per cent. Official council figures show that nearly half of all current working-age support claimants in the borough—49.6 per cent—receive a disability benefit.
Single parents with children under five could also see their maximum support drop from 80 per cent to 50 per cent. For general working-age claimants without disabilities, maximum support could fall from 75 per cent to 50 per cent.
The council is also considering lowering the property band cap from Band D to Band C, meaning people in higher-banded homes would receive less support.
According to the report papers, Croydon currently spends roughly £39m annually on council tax relief, with £25m spent on working-age residents. If implemented, the changes would cap total council tax support at 50 per cent, leaving Croydon with the joint-lowest level of support among all London boroughs.
The proposals come as the council seeks to identify between £3.6m and £12m in annual savings as part of its ongoing ‘Best Value’ intervention. This intervention is mandated by the government-appointed commissioners, who are currently overseeing the council’s efforts to stabilise its finances.
Croydon currently provides a mid-to-high level of support compared with the capital’s 31 other boroughs, offering more generous help than fellow outer London boroughs like Bromley, Enfield and Harrow.
Croydon Council voted to increase council tax by 4.99 per cent in its budget this April. This increase — the maximum allowed by the government without a referendum or special permission — includes a 2 per cent levy specifically for adult social care.
However, Croydon’s finance officers warned that the proposed higher council tax bills for low-income households could reduce the council tax collection rate from 98 per cent to 97 per cent.
The council is now seeking feedback on potential mitigations to the proposed support scheme cuts. These include an expanded hardship scheme for up to two years, to allow for transitional protection. This is a case by case fund whereby some people deemed to be suffering particular financial hardship as a result of the changes would be given discounts.
Defending the decision to consult on the scheme, Executive Mayor of Croydon Jason Perry highlighted the council’s legal obligations under government intervention, adding: “We need to make sure we are providing the right support to the people who need it most.
“Croydon’s current council tax support scheme is more expensive than those operated by many other London boroughs. It is only right that we look at options that other councils have successfully introduced and consider different approaches for Croydon.”
He concluded: “No decisions have yet been made on the future of the scheme. Should Cabinet approve the consultation it will provide a genuine opportunity for people to shape future recommendations.”
However, Croydon Labour Leader Stuart King told the Local Democracy Reporting Service that one reason the council tax support scheme is so expensive is that council tax has risen by more than 33% since Mayor Perry was first elected in 2022.
He added: “With over 19,000 people potentially affected by these changes Mayor Perry is considering, understanding the impact of them will be crucial. So the consultation he is about to undertake must be comprehensive and meaningful, and a full equalities assessment of the impact of each option must be put to councillors.
“Otherwise how can you come to a judgement on the right balance between what is affordable to taxpayers and the level of support the poorest households in Croydon need?”
If the council approves the proposals at tomorrow’s Cabinet meeting (September 23), a statutory six-week consultation will take place before a final decision by Full Council in February 2027, ahead of implementation in April 2027.
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