Kensington and Chelsea Council is considering potential cuts to its Council Tax Reduction Scheme (CTRS) for working residents, a move that could affect thousands of households. The decision to consult on the changes comes as the council faces increasing financial pressures and seeks to ensure the scheme's long-term sustainability.
The Leadership Team discussed the proposal at a meeting on Wednesday, 15 October 2025, where they considered seeking permission to consult on potential changes to the CTRS for working-age residents from April 2026. The consultation is part of a broader response to intensifying financial pressures facing local government, according to a report presented at the meeting.
An initial Equalities Impact Assessment has been completed, and early assessments suggest that any reduction in support will disproportionately impact certain groups. The Equalities Impact Assessment will support the consultation, with a final version reflecting feedback and proposed scheme design to be included in the follow-up report. Caseload breakdowns by ward and protected characteristics (where available) will be incorporated prior to the consultation. The Assessment will be updated throughout the consultation process in response to feedback, data and modelling.
The current Medium-Term Financial Strategy (MTFS) identifies an indicative saving of £441,000 from 2026/27, based on a planning assumption of a 10% reduction in the overall cost of the working-age schemes. The council is consulting on whether the current level of support under the scheme remains appropriate and financially sustainable.
Currently, RBKC operates three distinct Council Tax Reduction Schemes:
- A statutory national scheme for pension-age residents.
- A banded scheme for working-age residents on Universal Credit.
- A legacy scheme for working-age residents not on Universal Credit.
Any potential change proposed here would apply to both the banded scheme and the legacy scheme. The Pension-age scheme is out of scope as it is set nationally.
The Leadership Team considered the following options:
- No change (retain current 100% support)
- Reduce overall scheme cost by 10%
- Reduce overall scheme cost by 20%
The report noted that there are a number of risks to reducing the level of Council Tax support, including the risk of pushing some households below the government-defined minimum standard of living, and a heightened risk of non-payment and increased arrears. The impact of reduced support could be partially mitigated through proactive communication and targeted engagement with those newly required to contribute, as well as strengthened hardship support under Section 13A. However, these mitigations come at a direct cost to the Council and will impact the final cashable value of the reduction.
According to the Changes to the Council Tax Reduction Scheme report, approximately 8,532 working-age residents are currently in receipt of support, with around 5,000 receiving the full 100% reduction. Compared to many other London boroughs, RBKC still offers the majority of residents on the scheme full relief. Among those in receipt of CTRS are Grenfell bereaved and survivors, currently 91 working age claims with 82% in receipt of 100%.
The Council will carry out a six-week statutory consultation with residents, in line with Schedule 1A of the Local Government Finance Act 1992 and the Council's Charter for Public Participation. The proposed consultation is scheduled to be launched from 27 October 2025 to 8 December 2025, with a view to completing an analysis, inclusion in the February Leadership Team budget report and presenting final proposals to Full Council 25th February 2026.
