Impact of council tax support scheme cuts spelled out as civic centre faces £39m budget gap

Cuts to council tax support scheme would hit harder for disabled people, carers, ethnic minorities and women, reports Simon Allin, Local Democracy Reporter

Enfield Civic Centre

Women, ethnic minorities and disabled people are among those set to bear the brunt of planned cuts to council tax discounts affecting thousands of Enfield residents.

A proposed shake-up of the borough’s council tax support scheme would see residents already on low incomes pay an average of £8.84 more per week, with the changes having a “significant negative impact across all working-age claimants”.

More than 10,000 households would see their weekly bills rise by up to £5. But some would face much steeper costs, with more than 1,000 paying between £20 and £25 extra per week and 127 facing hikes of £40 to £65 per week.

Enfield Council claims its current council tax support scheme is one of the most generous in London, and the Labour administration’s 2022 local election manifesto pledged to “maintain our generous £38million council tax support scheme – benefiting a third of Enfield’s households”.

But with a £39.4m budget black hole to fill, the authority wants to slash the cost of the scheme to £26m.

The proposed shake-up would see the minimum payment made by working-age claimants rise from 24.5% to 50% of the council tax rate for their properties.

In addition, support would only be provided up to band C property values. A minimum deduction of £5.52 per week would also be introduced for non-dependant adults living in a property, while current deductions would rise by 20%.

After factoring in the costs of the proposed shake-up, the net saving to the council is estimated to be £7.3m.

But reports drawn up by the council reveal disabled and carer households would “definitely be negatively impacted”, as they would no longer receive 100% council tax support.

Ethnic minority households are also expected to be “disproportionately negatively impacted” by the changes, as analysis suggests they are more likely to be claiming council tax support.

With female claimants outnumbering male claimants by around two to one, women are also set to be disproportionately affected.

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The council has set out a range of actions to reduce the impact of the changes, including adding an extra £1m to a hardship fund designed to support the most vulnerable residents.

Pensioners, war widows and care leavers under the age of 25 are exempt from the increase in the minimum payment.

The proposed changes were set out in reports presented to a meeting of the council’s cabinet on Wednesday (13th).

During the meeting, members of the Labour administration blamed the council’s financial woes on the Conservative government’s management of the economy, claiming it had fuelled the inflation that accounts for £20m of the budget gap forecast for the 2024/25 financial year.

They also said the government had cut its funding for council tax support since handing responsibility for the schemes to local authorities.

The cost of Enfield’s council tax support scheme is expected to climb to £50m by 2026 unless changes are made. Council leader Nesil Calsikan said this was “not sustainable or affordable for any local authority” and the council had “no choice but to look at our options”.

She added: “The fact that we would still maintain one of the most generous council tax support schemes is a reflection of our commitment to support the poorest in our borough, but we have to do that in the means that are available to us.”

Speaking outside the meeting, Conservative shadow cabinet member for finance James Hockney said the proposed changes would break Labour’s manifesto pledge to maintain support at £38m.

He added: “These devastating Labour cuts will impact over 30,000 low-income households in the borough – including over 12,000 lone-parent households with one or more children.

“Enfield Labour’s reckless financial strategy of the council, being the tenth most indebted authority in the country, is having huge consequences. As an opposition we warned the Labour administration about [this] for years – which they ignored.

“Managing the debt means taking increasingly huge amounts of money out of the frontline services to residents; in 2021 [debt repayments were] £20m, last year £26m, this year £32m, next year £34m and the following year £42m.

“All money that has to be found – and consequently devastating cuts to the services the council provides to residents to cover that debt.”

Cabinet members agreed to hold a twelve-week public consultation on the proposed changes, which is set to run from September until December. A final decision on whether to implement the changes will be made during a cabinet meeting in February.

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