Council Tax Reduction scheme - consultation on proposed changes from 1st April 2026
We want to know what you think about a proposed change to Newham Council’s Council Tax Reduction (CTR) scheme for working-age households, which we are considering as part of our 2026/27 budget setting process in the face of a significant budget gap forecast of £90 million facing the Council by 2028/29 because of the continuing rise in cost of temporary accommodation and social care.
Despite significant financial pressures, Newham still has the lowest council tax of any outer London borough with a band D property charged £1,855.96 in 2025/26, made up of £1,365.58 for Newham's services including an additional amount for Adult Social Care and £490.38 for the Greater London Authority. Our current CTR scheme helps working aged residents who are in most financial need, by reducing their council tax by up to 80%.
We are having to make changes because, over the past 14 years, grants we get from central government have reduced despite growth in Newham's population and demand for our services. Pressures on services for vulnerable children and adults, providing housing, keeping our streets clean and safe, running our libraries and children’s centres has been exacerbated by rising costs for these services, including the massively increased housing need in Newham. This means we must look for savings to balance our Council budget in the 2026/27 financial year.
Without making changes to the CTR, we would instead have to look for savings of at least £1.5m from other areas of the council’s budget – potentially stopping a whole service or closing a facility people rely on elsewhere.
We are considering several options to alter the scheme to make it fair for all council tax payers so that we can continue to make sure those in greatest need can be helped the most. We need your views on proposals for a number of changes to the scheme, the most significant of these is reducing the maximum help available from 80% to 70%. The consultation also offers the opportunity to consider reducing the maximum support to less than 70% (some London boroughs offer maximum support of 50% for example), further balancing the council’s need to make savings with the impact on all council tax payers. Using 2025/26 Council Tax figures, a reduction to 70% would potentially increase council tax payments for those households currently receiving CTR by an average of £2.61 each week (£11.31 each month) whilst saving the council £1.5 million each year; a reduction to 50% would increase payment by £7.24 each week (£31.37 each month) whilst saving the council £4.5 million each year.
We have included in the changes to the scheme, a proposal to give households support for the number of children allowed for in DWP means-tested benefits. This means that if the Government removes the two-child benefit cap introduced in April 2016, households getting CTR will be able to fully benefit from the increase in their household income.
The consultation also wants to consider what additional steps we could take to make any changes fair for everyone, including making everyone aware of all the different benefits and entitlements that they could be claiming for, and that we know many people in Newham aren’t.
If you are having difficulty managing financially, it’s essential to check that you are claiming all the benefits available to you. For working age residents this will be Universal Credit through the Department for Work and Pensions (DWP) who can also support you into employment. For more details go to www.gov.uk/universal-credit. The DWP can also advise on entitlement to carers and disability benefits.
If you feel you need help with your council tax and are not currently receiving Council Tax Reduction, you can apply through our website: Make a claim for Council Tax Reduction – Council Tax Reduction – Newham Council
And please remember, these proposed changes would only affect working age households; pensioner households are not affected at all.
Our consultation offers you the opportunity to have your say whether you receive any sort of reduction or not, and we also want to hear from people who work with vulnerable or disadvantaged residents and who advocate for them.
You have until 11.59 am on 13th January 2026 to feed back your views, after which all your comments will be considered by Councillors who must look to set a balanced budget by the end of February.
Phases
Consultation
The Council is legally required to consult on any proposed changes to our Council Tax Reduction (CTR) scheme. The consultation aims to gather feedback from council tax payers receiving CTR; other council tax payers; and interested parties such as welfare and advice organisations on the proposed changes to the CTR scheme. Your input is crucial in helping us design a scheme that balances financial sustainability with the need to support vulnerable households.
What is the Council Tax Reduction Scheme?
Newham offers a reduction in Council Tax to households that might struggle to pay the full amount. The council does this by agreeing a local Council Tax Reduction Scheme for working-age residents. To work out a household's entitlement to CTR we compare their income and capital (savings etc.) with an assessed needs amount based on the Department for Work and Pensions' published figures that allows additional for having dependent children and disability. We also take into account the circumstances of other adults living in the household - we call these non-dependents - and make a deduction if the other adults can contribute to the payment of council tax. The current scheme provides working age households with a reduction of up to 80 percent of their council tax bill.
Pensioners can also receive Council Tax Reductions but the Government decides how much Council Tax Reduction pensioners will get. Pension age residents can be eligible for a discount of up to 100 percent of their council tax bill. Pension age resident are not affected by the proposed changes.
What are the proposed changes?
Reducing the maximum support
Currently, working age residents can receive help through CTR of up to 80% of the amount of their Council Tax. We are proposing to decrease the maximum support working age households can receive to 70%. However, we would welcome views from respondents on reducing the level of support to a lower level to achieve the best balance between Newham’s future financial position; the impact on all council tax payers; and residents’ ability to manage their council tax liabilities.
The table below sets out the increase in weekly council tax payment for affected households depending on the level of maximum support provided by the scheme along with the annual saving for Newham. Note: Newham currently only benefits from 73.6% of the total increase in payments affected households make as 26.4% of the total council tax relates to amounts collected for the Greater London Authority.
Increasing non-dependent deductions
Non-dependent deductions apply where other adults are living with the council tax payer applying for or entitled to Council Tax Reduction. The amount of the deduction depends on the other adults' income. The circumstances where no non-dependent deduction such as where the council tax payer is entitled to certain disability benefits will remain the same as under the current scheme.
We are proposing to increase the amount of non-dependent deductions in future by the rate of inflation using the consumer price index (CPI) for the September before the start of the council tax year (1st April). This figure is also used to increase Department for Work and Pensions (DWP) benefits for the following year. Based on 2025/26 figures this proposal would affect 1,884 households with an average increase in council tax payable of £0.41 each week.
Removing or amending the two-child benefit cap in line with any changes made by central Government to other means tested benefits
From 6th April 2017, the previous Conservative Government introduced a limit on the support through DWP means-tested benefits that households with children born on or after that date can receive - this is often called the two-child benefit cap. If the current Government decided to remove this cap in DWP means tested benefits such as Universal Credit (UC) then a household’s income would increase. If Newham did not also remove the two-child benefit cap in line with those changes, the household could potentially lose 25% of that increase in reduced CTR.
Based on households currently receiving CTR, 1158 households are affected by the two-child benefit cap in the calculation of their entitlement. We are not able to provide an exact figure for the impact on these households if the current Government was to remove the cap and Newham did not as we cannot be sure of the additional amount of DWP benefit they would receive. As an example of the potential impact, for 2025/26 DWP provides an allowance of £67.57 each week for a child in Universal Credit and, if Newham did not amend its scheme, affected households would lose £16.89 each week in CTR.
How to provide your views and feedback on the proposals?
Click the "Complete the consultation questionnaire" button and provide responses to the questions on each of the proposals.