More than 19,000 low-income and disabled Croydon residents could face higher monthly bills under proposed cuts to the borough's council tax support scheme, which currently costs around £39 million per year. If implemented in April 2027, the changes would leave Croydon with the joint-lowest level of council tax support in London, according to council documents.
Proposed changes to discounts
Under the proposals, non-working disabled claimants would see their maximum council tax discount reduced from 100 per cent to 50 per cent. Official council figures show that 49.6 per cent of all current working-age support claimants 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, while general working-age claimants without disabilities could see support 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 residents in higher-banded homes would receive less support. The report papers indicate that Croydon spends roughly £39 million annually on council tax relief, with £25 million allocated to working-age residents. The changes would cap total council tax support at 50 per cent, aligning Croydon with the lowest level among all London boroughs.
Financial context and legal obligations
These proposals come as the council seeks to identify between £3.6 million and £12 million in annual savings under its 'Best Value' intervention, mandated by government-appointed commissioners overseeing the borough's financial stabilisation. Croydon currently provides a mid-to-high level of support compared with London's other 31 boroughs, offering more generous help than outer London boroughs like Bromley, Enfield, and Harrow.
In April, Croydon Council voted to increase council tax by 4.99 per cent, the maximum allowed without a referendum or special permission, including a 2 per cent levy for adult social care. However, finance officers have warned that higher bills for low-income households could reduce the council tax collection rate from 98 per cent to 97 per cent.
Consultation and political responses
Executive Mayor Jason Perry defended the consultation, stating: "It is only right that we look at options that other councils have successfully introduced and consider different approaches for Croydon." He added: "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 the scheme's high cost stems partly from council tax rising by more than 33 per cent since Mayor Perry was first elected in 2022. King said: "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."
The council is seeking feedback on mitigations, including an expanded hardship scheme for up to two years to provide transitional protection for those facing particular financial hardship. If Cabinet approves the proposals at its meeting on September 23, a statutory six-week consultation will follow, with a final decision by Full Council in February 2027, ahead of implementation in April 2027.
