In light of the cost of living crisis and the migration to Universal Credit prompted by the pandemic, the development of Council Tax Support (CTS) schemes that support households could not be more timely.
Rising living costs are putting more pressure on low-income families. Many of these households, having recently been hit by the removal of the £20 uplift to Universal Credit, were already struggling to get by so their financial outlook for 2022 looks bleak.
At the same time, people in receipt of Universal Credit must apply for CTS themselves compared to under the legacy benefits system, when they were automatically assessed for it if they were getting Housing Benefit. In London this has led to over 100,000 households missing out on an average of £1,000 a year. For councils the new claims process means expensive administrative costs and financial crisis intervention.
For some leading local authorities, these factors have been a catalyst for innovation in CTS scheme design.
Listen back to hear
- The cost of living crisis, rising poverty and the role of a CTR scheme
- Making CTR schemes more accessible and efficient using UC data
- Drivers for change and latest CTR scheme options
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Councils are increasingly relied upon to support residents struggling with poverty. Alongside discretionary support, Council Tax Reduction is an essential tool for councils to help alleviate poverty and reduce debt.
CTR take-up for households migrated to Universal Credit is low. The average in take-up of CTR in London boroughs is 25% and we estimate that 100,000 eligible Londoners are missing out on around £1,000 per year because they are not claiming CTR.
The challenge for councils is managing the unavoidable tension between the cost to the council and supporting the increased number of residents in need of support.