Council tax collection in Barking and Dagenham experienced a 0.5% dip in the third quarter of the 2025/26 financial year, a reduction of £577,000 in collected revenue compared to the same period the previous year. This decline is attributed to several factors, including changes to the Council Tax Support scheme and the ongoing cost of living crisis.
The reduction in the Council Tax Support scheme, which lowered the maximum award from 85% to 63%, has significantly increased the council tax burden on low-income households. The amount charged to these residents has risen from £6.5 million in 2024/25 to £10.3 million in 2025/26. To manage this unprecedented increase, the council's tax team has actively engaged with residents to establish affordable repayment plans, which has reportedly improved collection rates for those on the lowest incomes.
Beyond the changes to the support scheme, the Debt Management Performance 2025/26 (Quarter 3)
report [https://lbbd.moderngov.co.uk/documents/s179827/Debt%20Man%20Q3%20Report.pdf] indicates that the council's discretionary relief fund has also played a role in the collection dip, as it has been used to support residents. Furthermore, the report highlights that the continuing cost of living crisis, coupled with rising council tax levels, has increased demand on the service beyond its current capacity.
The council has awarded £360,000 in discretionary relief to households facing significant bill increases and demonstrating efforts to maintain payments. The report also notes the ending of the Becontree Collection Service, the council's internal enforcement agent. A joint procurement process with Parking for three new suppliers is underway, with the new services expected to commence in March. The cost of this procurement has not been specified.
The projected impact of the cost of living crisis on future council tax collection rates remains a concern, as it continues to increase demand on services. The report states that this situation has pushed demand beyond current capacity.
