In their budget plans for the coming year, Tower Hamlets’ Labour Mayor and councillors are protecting support for the borough’s poorest residents through the Council Tax Reduction Scheme (CTRS).
The scheme, which reduces or completely removes council tax bills for residents on the lowest incomes, is one of the most generous schemes in the country. Many councils have scrapped the 100% discount, however Tower Hamlets has retained a full discount.
Almost 28,000 families receive some form of discount as a result of the CTRS and over 19,000 families received a 100% reduction over the last year and haven’t had to pay a single penny of council tax.
In 2013 the Conservative/Lib Dem coalition abolished the national council tax benefit scheme and instead instructed local councils to implement their own local versions of the scheme, leaving councils to bear the cost. The Tower Hamlets scheme is estimated to cost over £26.5m in the new financial year.
Research from the IFS last year found that 90% of English councils had made changes to their council tax reduction schemes, almost all of them cuts.
The most common change to CTR schemes across the country is to introduce a minimum payment meaning that all households must pay at least a proportion of their council tax, and the IFS research highlights that a fifth of councils have a minimum payment of over 20%. This is not the case in Tower Hamlets, where eligible residents continue to receive a full discount on their council tax.
The Full Council will vote on the budget proposals at a meeting on Wednesday 19th February.
Since austerity began in 2010, Tower Hamlets Council has had to save £190m and on current information needs to save a further £39 million by 2023.
Mayor of Tower Hamlets John Biggs said: “Tower Hamlets has faced year-upon-year of funding cuts and we’ve worked hard to protect our frontline services and the most vulnerable in our borough. Labour councils are often referred to as the last line of defence against Conservative austerity cuts, and I’m proud that we’ve been able to protect our council tax reduction scheme meaning the poorest families don’t have to eat into their own hard pressed budgets for council tax. However every year, with constant budget pressures, we have to fight to preserve this important assistance for local people.”
Cllr Candida Ronald, Cabinet Member for Resources and the Voluntary Sector, said: “We are one of the few councils in the country to continue to offer a full reduction on council tax bills, protecting some of the poorest people in Tower Hamlets, many of whom have struggled with other austerity measures like the introduction of universal credit. Our discount means 28,000 households get extra help and 19,000 households don’t have to pay any council tax at all, showing the important role that Labour councils play in defending communities from the worst of the Tory austerity agenda.”