Croydon Council is set to consult residents on proposed changes to its Council Tax Support (CTS) scheme for working-age claimants, with potential alterations taking effect from April 2027. The council, described as one of the most financially stressed councils in London,
faces significant legacy and current financial pressures, including unfunded national cost pressures and a forecast General Fund revenue budget overspend of £2.3 million. The Housing Revenue Account (HRA) also forecasts an overspend of £3.9 million, and the Dedicated Schools Grant (DSG) has a projected overspend of £45.0 million. The council's historic borrowing and subsequent debt burden
is a critical factor in the non-sustainability of its revenue budget. These financial pressures necessitate a review of the current CTS scheme, which costs approximately £39 million annually and aims to achieve savings ranging from £3.6 million to £11.9 million.
Cabinet members met on Wednesday, September 23, 2026, to discuss the review. The proposed changes aim to achieve these savings by reducing the maximum award percentages for various groups. Specific percentage reductions are being considered for disabled residents not in employment, lone parents with children under five, and other working-age residents not in a protected group.
For disabled residents not currently in employment, options range from reducing the maximum award from 100% to 50% (saving £8.5m), 70% (£5.1m saving), 80% (£3.4m saving), or 90% (£1.7m saving). Lone parents with a child under five could see their maximum award reduced from 80% to 50% (£0.8m saving). For other working-age residents not in a protected group, options include reducing the maximum award from 75% to 50% (£2.5m saving) or 65% (£1.6m saving).
Other potential changes under consideration include modifications to earnings disregards, band caps, and capital limits. The current earnings disregard for disabled working claimants is £50 per week. Options 1 and 2 propose reducing this to nil, while Options 3 and 4 suggest reducing it to £25 per week. The current band cap for most claimants is D, with no cap for disabled not working residents; proposed changes include reducing this to C and/or introducing a band cap for disabled not working residents. Current capital limits are £16,000 for protected groups (disabled not working) and £8,000 for all other claimants, with suggestions to reduce or increase these figures.
The criteria for who is included in the 'disabled not working protected group' are also being reviewed. Currently, this category has a wide scope, but the proposal is to refine it to include only residents awarded a disability benefit indicating they are unable to move into employment, specifically those awarded Limited Capability for Work Related Activity (LCWRA) as part of their Universal Credit award.
Councillor Jason Cummings, Cabinet Member for Finance, stated that Croydon's current CTS scheme is more generous than many other London boroughs with fewer financial challenges. He emphasised that the proposed changes aim to achieve savings while balancing the impact on residents and protecting vulnerable groups.
The council has not made significant changes to its CTS scheme since April 2022. In contrast, 17% of English councils made changes to their schemes in 2026-27, with 45% of those reducing the maximum CTS award. The report estimates that these proposals could affect up to approximately 20,000 residents. The current scheme breakdown by claimant type includes 8,416 disabled not working residents, and 10,021 'all other claimants' which includes lone parents with children under five. There are also 905 disabled working claimants.
Following the consultation period, which is scheduled to begin on September 28, 2026, and last for six weeks, a final recommendation on any changes will be presented to Full Council in February 2027. An equalities impact assessment will also be completed to consider the potential effects of any proposed alterations on different groups within the borough. The public reports pack for the cabinet meeting can be found here.
