Islington Council has announced it will maintain its council tax exemptions and discounts for the borough’s poorest residents over the next year, after other local authorities move to scrap similar schemes.
By Josef Steen
Islington Council has announced it will maintain its council tax exemptions and discounts for the borough’s poorest residents over the next year, after other local authorities move to scrap similar schemes.
At last Thursday’s full council meeting (12 December 2024) the Town Hall agreed unanimously to continue with its council tax support (CTS) scheme with “no major changes” made.
The CTS scheme has been on offer for many years, but councillors revealed updates made to the policy in April have made thousands of residents fully exempt for the first time.
Cllr Gulcin Ozdemir (Labour) said an extra 8,845 households in the borough were no longer required to pay the levy, and an additional 5,787 were now in receipt of a 95 per cent discount.
“This support scheme is a crucial part of the safety net we have to support our residents.
“We throw a lot of stats and figures around in council meetings, and these may just seem like another number.
“But with the price of energy, food and bills increasing this will make a noticeable difference for those making hard choices between paying their bills and buying food,” she said.
Cllr Ernestas Jegorovas-Armstrong (Green) welcomed the move, thanking council officers but also paying tribute to the work of his colleague, Cllr Caroline Russell, who worked to “make sure this happen[ed]”.
“We know the massive impact that this makes,” he said.
The decision comes after it was reported last week that Greenwich Council in south London plans to remove its universal 100 per cent discount, first introduced in 2020, as part of a plan to save £1 million.
This follows Somerset Council’s decision in July to consult on proposed changes to its council tax discount scheme, which would see some of the county’s low-income residents lose their exemption.
The Town Hall’s policy document outlines the scheme’s eligibility criteria, and includes three classes of reductions under Islington’s scheme:
Class 1: For pension credit-age individuals, who are protected under the Local Government Finance Act.
Class 2: For pension age people with a council tax liability on 1 April 2025, who are entitled to a minimum reduction of £100 per year, unless their liability is lower than this, in which case the reductions will match the person’s liability.
Class 3: For working-age residents, support is based on income bands and household composition, with reductions ranging from 100 per cent for the lowest incomes to 35 per cent, as income increases.
Alongside three classes of reductions are seven ‘bands’ based on income, household composition and other details.
Band one, for example, covers “persons who are passported, not working” which refers to:
- People on legacy benefits receiving Personal Independence Payments (PIP) or Disability Living Allowance;
- People on Universal Credit with limited capability for work; and
- Single parents with zero earnings with a child aged under five years
Those in this band receive full exemption from council tax.
The document also states that income bands for class 3 may be updated every year in line with inflation, based on the consumer price index (CPI), and capped at a maximum increase of 10 per cent.
Provisions are also in place for people in exceptional circumstances. Individuals who have had to move home due to domestic violence, for example, are exempt from paying the levy for up to 52 weeks.
According to Town Hall documents, the number of registered council tax accounts in the borough is over 111,738, of which 25,188 are in receipt of council tax support, and 18,136 are working-age households.
The proposal also revealed the overall cost of the CTS scheme is £36.18 million, which is £590,000 more than the council’s modelled figures.
This is due to more caseloads and an increasing number of households on band one, the report added, although the Greater London Authority (GLA)’s contribution puts the total overspend at £445,000.
The council anticipates this figure will fall as more households migrate onto Universal Credit before the end of the current financial year, and actual spend “moves more into line” with previously modelled costs.
“Given the financial challenges faced by the council”, the support scheme will undergo another review by next spring, with any proposed changes subject to public consultation, the report added.
Council tax in England is set to rise by up to five per cent in April, meaning the average household faces an increase of more than £100 to next year’s council tax bill.
