Wandsworth Council is proactively supporting residents through the ongoing migration to Universal Credit, while also adapting its Council Tax Reduction Scheme to better serve low-income households. However, the council faces challenges including an increased workload and rising rent arrears due to the Universal Credit migration.
At a meeting of the Finance Committee on Thursday, 3rd July 2025, the council reviewed the progress of the Universal Credit migration and the Council Tax Reduction Scheme, as part of a broader discussion on the council's financial performance and strategic initiatives. The success of the new Council Tax Reduction scheme is being measured by its simplicity, adaptability, and the level of support it provides to vulnerable residents.
Since April 2024, the Department for Work and Pensions (DWP) has been managing the migration of residents from legacy benefits to Universal Credit. According to the Public reports pack, approximately 6,000 working-age residents in Wandsworth were expected to transition from Housing Benefit to Universal Credit during this period. The council has taken a proactive approach to support residents through this transition, including:
- An extra two-week payment of Housing Benefit (Transitional Housing Payment).
- Issuing letters, text messages, and emails to remind customers to claim their benefits.
- Making phone calls and conducting home visits to assist customers.
- Proactive engagement with Council tenants.
- Funding an additional Financial Inclusion Officer post.
To date, 4697 migration and termination notices have been processed, with most cases receiving an additional two-week payment of Housing Benefit to ease the transition. Prior to the start of the managed migration, it was predicted that the overall Housing Benefit/Council Tax Reduction caseload would reduce by approximately 20% by the time that full migration was completed. Whilst the Housing Benefit caseload has reduced by 24% since April 2024 the Council Tax Reduction caseload has increased by 7%, resulting in an 8% overall reduction based on current caseload. This is likely to increase to around 15% once the remaining cases migrate.
The annual cost of the means-tested Council Tax Reduction scheme in 2023/24 was £5.4m (£9m including pensioners), which has increased to £6.5m (£10.4m including Pensioners) in 2024/25 under the new banded scheme. The Council's status banded Council Tax Reduction scheme is one of the most generous in London with an annual cost of £6.5m (£10.4m including Pensioners) for 2024/25 in council tax income foregone. The cost of the scheme has increased by £1.1m when compared to the cost of the previous means tested Council Tax Reduction scheme in 2023/24 of £5.4m (£9m including pensioners) and is higher than the £5.7m projected (£6m when adjusted to reflect council tax levels for 2024/25).
The council has also implemented a new Council Tax Reduction (CTR) scheme, moving away from a traditional means-tested approach to a simpler, banded system. The aim is to create a more adaptable and easily understood structure that minimises the impact of income fluctuations and reduces the administrative burden on the council. The key differences between the old means-tested scheme and the new banded system are its simplicity, adaptability, reduced administrative burden, and increased support for existing households. Unlike a means tested scheme, it excludes benefit income which is more volatile to changes.
The new Council Tax Reduction scheme contains five status bands for working-age applicants:
| Category of Household | Household type | CTR % |
|---|---|---|
| Working Age 1 | Vulnerable households | 100% |
| Working Age 2 | Households with no earned income and children | 90% |
| Working Age 3 | Households with no earning income without children | 75% |
| Working Age 4 | Households with earned income and children | 80% |
| Working Age 5 | Households with earned income and no children | 75% |
Maximum earned income caps were also set:
| Single person | £125 |
|---|---|
| Couple without children | £160 |
| Lone parents/couple with 1 or 2 children | £250 |
| Lone parents/couple with 3+ children | £275 |
Universal Credit migration has presented several challenges for Wandsworth Council, including an increased workload, a rise in invoiced recovery of overpayments, and an increase in rent arrears. Since the end of 2023/24, there has been an increase in the value of housing rent arrears where a Universal Credit claim is present from £6.9m to £8.3m at the end of March 2025.
The Finance Overview and Scrutiny Committee also discussed the Council's Financial Results for 2024/25, the Change Programme Benefits Update, Corporate Plan Actions and KPIs Performance Monitoring, and the Finance Overview and Scrutiny Committee Work Programme. More information can be found in the Public reports pack.