Thousands living in central London face having council tax support slashed as funding crisis deepens

Help for low income households with their council tax bills could be slashed by as much as a third in central London.Westminster City Council said the proposal to reduce council tax support for working-age residents, potentially impacting more than 15,000 people, is designed to address an expected huge drop in its spending powers.The Labour government is set to reduce Westminster’s grant by £100million under its so-called Fairer Funding Review — a major shake-up to central government funding levels.Depending on the exact level of reduction chosen, the cut to council tax support by the Conservative-controlled administration at Westminster City Council is projected to generate between £147,000 and £817,000 per year in additional revenue for the local authority.Westminster City Council is one of a host of London boroughs looking at how to deal with black holes in its upcoming budgets following Labour ministers’ reforms to council funding in England.Councillor Paul Fisher, Westminster’s cabinet member for finance, approved the consultation decisionConservativesStephen Cowan, leader of the Labour-run Hammersmith and Fulham Borough Council, said his administration was being forced to embark on the “biggest cuts programme we’ve ever introduced” as it prepares for its spending power to be cut by more than half over the next four years.Mr Cowan, speaking at a council cabinet meeting on Monday, said the priority would be to protect public services during the process.The west London local authority has warned it could have to hike bills by an unprecedented 150% – Britain's biggest-ever percentage council tax rise – after being given special dispensation by ministers to go beyond the current 4.99% limit on increases without requiring a local referendum. Southwark Council, run by a coalition between the Green Party and the Liberal Democrats, has started what Green leader James McCash called an “honest conversation” with residents about the “difficult choices” it faces when it comes to balancing the books.The south London borough has made a calculator tool available on its website to help rate payers visualise what the £102million shortfall, caused by the funding shake-up and demands on social care and temporary accommodation, could mean in terms of public service cuts.Councillor Stephen Cowan, leader of Hammersmith and FulhamPA WireCouncil tax support is offered to those on certain benefits or who have a low income.Westminster is one of seven London local authorities that offers qualifying residents 100% council tax relief. Read MoreA consultation currently underway could bring about a change to that arrangement. It could see assistance reduced by between 10% and 30% for working-age applicants.Councillor Paul Fisher, cabinet member for finance, approved the decision to proceed with the consultation earlier this month.Westminster has been upfront with bill payers that a council tax rise is looming. The borough is far from the only council implementing cuts to council tax discounts, with similar proposals having already been approved in the last 18 months in Kensington and Chelsea, Croydon and Barking and Dagenham.Westminster’s council tax support scheme costs the council £13.6million per year in lost revenue, with more than 15,600 claimants. Westminster City Hall expects its budget to be cut by £100mGoogleMost of the claims are by people of working-age (9,437) – made-up of those with limited capacity to work (6,580), households with children (3,935) and single parents (1,985).If a reduction in support is approved, someone in receipt of council tax support and living in a Westminster Band D property would need to contribute between £2.01 and £6.03 per week towards council tax. Previously they may have paid nothing.Gerald Almeroth, the council’s executive director of finance and resource, said that the council’s current scheme of 100% council tax support made Westminster an “outlier”.In a report, Mr Almeroth said: “Given the significant reduction in central government funding and continuing pressures on its finances, the council must consider all available options to ensure its long-term financial sustainability and protect the delivery of essential services.“This includes reviewing the council tax support scheme for working-age claimants to ensure that all available resources are targeted effectively and support for the most vulnerable residents is maintained.”Ministers have argued that local authorities with “historically low” council tax levels will have the cash they receive from Whitehall reduced following a so-called “Fair Funding” review, forcing them to bring bills into line with national averages to make up shortfalls.