Islington Council has pledged to maintain its Council Tax Support Scheme (CTSS) for the 2026/27 financial year, despite inflationary pressures. The decision, made at a Council meeting on 4 December 2025, aims to provide continued financial relief to low-income households in the borough.
The estimated financial impact of maintaining the CTSS at its current level is expected to be broadly in line with 2025/26, uplifted by any increase in the level of council tax agreed by Full Council when setting the 2026/27 budget. For example, assuming a 4.99% increase in council tax in 2026/27 and no changes in caseload, the £37.9m latest CTSS cost in 2025/26 would increase by approximately £1.9m to £39.8m in 2026/27.
The proposals include:
- Maintaining a 0% discount for council tax exemption classes A and C, which apply to unoccupied and unfurnished properties.
- Maintaining a 0% council tax discount for empty furnished lets.
- Charging a premium of 100% on the council tax for properties empty and unfurnished for over a year, 200% for over five years, and 300% for over 10 years.
- Charging a 100% premium on second homes.
- Increasing working age bands earnings levels by the consumer price index (CPI) to keep pace with inflation, at an annual cost of £72,000.
Councillor Flora Williamson, Executive Member for Finance and Performance, highlighted the importance of the scheme, noting that it supports nearly 25,000 households in Islington. She emphasized the council's commitment to easing the financial burden on those struggling to pay their council tax bills, especially during times of rising costs.
The CTSS is one of the most generous schemes in the country, with 14,000 low-income households paying no council tax at all because of the introduction of a 100% council tax support band. The council spends £37 million on this scheme.
According to the Public reports pack 04th-Dec-2025 19.30 Council, there are currently 24,823 households receiving Council Tax Support.
The council will also continue to invest in the resident support scheme to help residents facing severe financial hardship and help low-income households to increase their household income by supporting them to claim their full benefit entitlement. To date the IMAX team has secured an additional £15.9 million for residents over the last year.
While the council tax support scheme is a core part of the council's support for financially vulnerable residents, it represents a significant cost. Given the financial challenges faced by the council it is appropriate to keep all areas of spend under review. Accordingly, a comprehensive review of the Council Tax Support Scheme including discretionary elements has been undertaken. The council was asked to note a review of the CTSS, including discretionary discounts, due to report in autumn 2025. The details of this will be confirmed in a separate report. Any changes proposed as a result of this review would be subject to public consultation.
Councillor Cinko-Oner noted that Islington's council tax relief scheme is still based on the Conservative government's 2015 child tax credit restrictions, which is the two-child benefit cap. She suggested that Islington could try to design out the piece at appendix a1 1.2 in the papers, given that the government has now removed the two-child benefit cap. The report mentions that the council will continue to support households with more than two children receiving council tax support. However, it also notes that the Islington council tax relief scheme is still based on the conservative government's 2015 child tax credit restrictions, which is the two-child benefit cap. The report does not explicitly state the barriers or challenges preventing Islington from updating its council tax relief scheme accordingly, but it implies that this is something the council is considering.
An Equalities Impact Assessment, included as an appendix to the report, found that the proposals would have a neutral impact on people with protected characteristics.
