South London council to make poorest to pay council tax for first time as 'no easy decisions left'

A pair of hands seen opening an empty purse
-Credit:Reach Publishing Services Limited


Sutton's poorest residents will have to pay council tax for the first time after the council voted through plans to slash discounts for some of the most vulnerable. Sutton's Liberal Democrat-led council needs to address a strained budget and has followed the lead of several other London boroughs in cutting its council tax reduction scheme, which gives money off to those on low incomes and in receipt of certain benefits.

The decision, made at Monday night's (January 27) council meeting sparked outrage among opposition members, who accused Lib Dem councillors of never 'knowing poverty'. The proposal, which will see every household in Sutton pay at least 5% of their council tax bill, was passed during a council meeting that lasted well into the evening. Sutton's pensioner discount scheme will remain unaffected.

The council admitted that its budget is under 'very significant strain', and it hopes the changes will bring in savings between £700,000 and £750,000.

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Since 2013, boroughs have had the freedom to set their own council tax reduction schemes, with the government reimbursing councils for the help they provide to poor pensioners. However, for working-age residents, councils must use their own resources to fund exemptions or reductions, leaving them with limited options to balance their books.

Councillor Wendy Clark, of the Conservative opposition, said it will impact those in the lowest-income households. Cllr Clark also pointed out what she deemed a contradiction in the council's rhetoric: "On the first page of the report, it said the proposal was in line with Sutton's ambitious plan to support vulnerable residents as a key priority. Yet, three pages later, it admitted that any reduction in the scheme will impact those in the borough who are struggling the most and on the lowest income."

Councillor Wendy Clark
Wendy Clark is the Conservative councillor for St Helier West -Credit:London Borough of Sutton

Cllr Clark, who spoke for fellow councillors David Hicks, Catherine Gray and Joe Quick, also accused the Lib Dem councillors opposite of being out of touch with their electorate. She said: "Maybe they have never known poverty, going without food so their children can eat, but I have, and I cannot agree to this callous proposal."

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In recognition of the proposal's impact, Sutton also green-lighted the increase of its own Hardship Fund by £50,000, to £110,000. This fund supports residents facing financial hardship, helping them cover essential costs such as food, fuel, winter essentials, and utility bills.

Despite this, Cllr Clark saw this increase as the council acknowledging the consequences of its own decision. She said: "By increasing the Hardship Fund by double and increasing funding by writing off unpayable council tax, they have acknowledged that people will not be able to pay. Moreover, those too proud and embarrassed to ask for help will not only have fiscal hardship but experience an increase in mental health issues."

The annual cost of Sutton's council tax exemption scheme is £14.5 million, with £9.5 million allocated to around 7,700 working-age households and the remainder supporting pensioner households. The changes being considered in Sutton include capping the discount at the Band C council tax rate and removing the 100% exemption.

Lib Dem Councillor Jake Short responded to Cllr Clark's impassioned arguments by agreeing that the policy will put additional strain on struggling households. Despite this, Cllr Short was also keen to stress the importance of Sutton's current budgetary pressures.

He said: "We are in agreement this is an exceptionally tough decision and that the council's budget is under very significant strain, but that is why we have to make this decision. We are absolutely not alone in having to make changes that we are making; councils across London are having to make similar changes."

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In the proposal report, the council stated that nearly half of London's boroughs plan to alter their council tax reduction schemes in 2025-2026 to address financial challenges. The survey found that 15 boroughs are considering changes. The Local Democracy Reporting Service has previously reported how Hillingdon plans to slash its discounts for those with more than two children, and how Brent Council will remove its 100% discount so everyone pays something.

Lib Dem Councillor Jake Short
Lib Dem Councillor Jake Short admitted 'there are no easy decisions left' when it came to making savings for the council -Credit:London Borough of Sutton

Cllr Short defended the scheme, claiming it 'tries its best to protect the most vulnerable' and noted that the council is increasing the Hardship Fund to assist residents most impacted by the new charges. He stressed that 'there are no easy decisions left' and that the council had little choice but to make difficult cuts.

Before the vote, the proposals had progressed through two public consultations. In general, residents who currently receive council tax support expressed more disagreement and less support for the proposed changes to the scheme than those who do not receive such assistance.

The only exception to this trend was the suggested change to the band cap, which saw a more even split in opinions. Despite the opposition to the council tax changes, Sutton Council insists the views gathered during the process are reflected in the new proposals.

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The council is expected to debate council tax levels and agree on its forthcoming budget at the next Full Council meeting on March 3.

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