Wandsworth Council's Cabinet has agreed to consult residents on proposed changes to the Council Tax Reduction (CTR) scheme, aiming to balance financial sustainability with affordability for residents.
The Cabinet met on Monday, 12 October 2026, and opted to proceed with Option 3 of the review for public consultation. This option is considered to strike a balance between reforming the scheme, ensuring affordability for residents, and maintaining the Council's financial stability.
Under the proposed changes, the current WA1 category, which offers 100% Council Tax Reduction for qualifying households, would be removed. In its place, additional income bands would be introduced to extend support to low-income working households who currently fall outside the scheme. These changes would be phased in over four years, with projected scheme costs decreasing from £12.45 million in 2027/28 to £7.14 million by 2030/31.
Considering the Options
Three options were initially considered for the CTR scheme review. Option 1, to do nothing and leave the scheme unchanged,
was rejected due to its failure to meet affordability objectives and the projected annual budget pressure of over £7 million by 2030/31, with total costs estimated at £55.9 million over four years. Option 2, which involved removing the WA1 category and extending the scheme to more low-income households by adding additional income bands, was also not chosen as the primary recommendation. While it offered the same structural reform as Option 3, it carried the greatest risks in terms of short-term impact on households currently protected under WA1 and potential increases in collection rates and debt levels.
Option 3, which also removes the WA1 category and introduces additional income bands (WA4 and WA5), was deemed the most suitable for consultation. This approach targets support more fairly by aligning assistance more closely with household income and ability to pay. It also offers additional support to low-income households who currently receive no CTR. This option was chosen for its balance between scheme reform, affordability for residents, and the Council's financial sustainability.
Mitigating Hardship and Protecting Vulnerable Groups
The council is committed to ensuring that the 'something' that all working-age households are expected to contribute towards their council tax bill is genuinely affordable and does not create undue hardship. The proposed changes under Option 3 include a phased reduction in support, with greater support provided in the first three years to moderate the risk of sudden hardship, arrears, and collection issues. The costs are projected to reduce over the four-year period, returning to the current financial envelope by 2030/31.
An Equality Impact Needs Analysis (EINA) has been undertaken for Option 3. This analysis highlights that the removal of the WA1 category will particularly affect disabled working-age residents, carers, lone parents and families with children under three, who will become liable for part of their Council Tax bill.
Pension-age claimants will remain unaffected. To mitigate these potential negative impacts, the EINA proposes phased implementation, accessible communications, targeted advice, discretionary support, and ongoing monitoring of arrears and hardship indicators. The potential effects will be further considered as part of the consultation process.
For tenants not believed to be in receipt of housing-related benefits, the Council has proactive measures in place to identify those struggling with their rents and offer assistance, as well as identify potential eligibility for benefits that could offset any increase in council tax.
Financial Context
The council tax reduction scheme is a statutory requirement for pensioners, with support set nationally. However, the council determines its own local scheme for working-age households. Wandsworth's current working-age scheme has historically been generous, but significant increases in council tax, driven by reduced government funding and rising demand for services, have made the existing model financially unsustainable. The Cabinet noted the financial implications, with Option 3 estimated to cost £40.8 million over four years.
The proposed reforms aim to ensure that all working-age households contribute something towards their council tax bill, while extending support to those on lower incomes who currently fall just outside the scheme's eligibility criteria. The changes would also aim to reduce disparities in treatment between households with similar incomes.
Further details on the Council Tax Reduction Scheme review can be found in the Public reports pack for the Cabinet meeting on 12th October 2026.