Hackney Council has tempered a controversial planned cut to its Council Tax Reduction Scheme before it goes to Cabinet next week.
The Town Hall last year consulted on a proposal to increase the minimum contribution all working age claimants would have to pay from 15 to 20 per cent.
Certain households would have seen their bills rise by almost £100 a year, but the council says it has to save £34m over the next three years in the face of “brutal” government cuts.
But Mayor Philip Glanville said last week that “the council and I have listened”, and revealed that the five per cent hike has been reduced to two per cent as Cabinet prepares to vote on the proposal next Monday.
Glanville said the two per cent will cover the expected £500,000 increase in the cost of the scheme, and committed to keeping it at this level “for at least two years”.
Z2K chief executive Raji Hunjan welcomed the change, but urged the council to “reconsider”.
She said: “We are pleased to see the Mayor and his team have listened to the concerns of all those who spoke out against the original proposal – including the 600 disabled and unemployed residents who backed Z2K’s petition – and scaled back their proposed cut in Council Tax Support.
“However, even a two per cent cut will be felt in the pockets and purses of Hackney’s poorest residents, and so we hope even at this late stage, they will reconsider whether this really is necessary.”
Defending the cut, Glanville said: “When the government handed responsibility for administering council tax benefit to local councils, it did so with a massive reduction in funding.
“To put this into context, our Council Tax Reduction Scheme helps over 27,000 Hackney working age residents to pay their council tax.
“The council currently invests over £25m, but we receive a miserly £8.6m from the government towards what, until 2010, was a fully funded national benefit.”
Glanville said the council has written to the government, “calling on them to return to fully funding the scheme, and stop passing on the costs to some of the poorest boroughs in the country”.
He added: “Throughout this process, we have of course considered other options which would not require us to increase the minimum contribution, but we want to ensure that we can have a scheme that supports the most vulnerable, is sustainable and doesn’t lead to cuts to other services – so doing nothing is a not an option.
“The scheme needs updating so that it fully interacts with other welfare systems such as Universal Credit, and we simply do not have the money to pay for the predicted £500,000 a year increase in the cost of the scheme.
“Other councils have sought to absorb all these costs themselves and return to a fully funded scheme, to do this in Hackney would cost an additional £2.8 million, funding we don’t have, given the numbers of residents we have to support.”
You can read the Mayor’s statement in full here.
Update: this article was amended at 15:48 on Thursday 18 January 2018 to include a quote from Lib Dem vice chair Darren Martin.