Kensington and Chelsea Council has effectively abandoned plans for a 3.2% Council Tax increase in April and will instead be introducing a cut. They are doing this in the form of a one off £50 "efficiency dividend" so in percentage terms the level of cut will vary but equates to 5.7% for a single person in Band D. For the wealthiest it equates to a freeze.

About 5600 elderly who get Council Tax benefit but will get a cheque for £50 in April.

Cllr Merrick Cockell, the Leader of the Council, said:

"The Council sets the fifth lowest Council Tax in the country.  It has also delivered greater efficiency year on year so we can now afford additional help for residents in these tough times.

"The £50 dividend has three great merits: it pays the
same to all residents liable for Council Tax, thereby giving
proportionately more help to those on the lowest incomes; it focuses
the help in April, when it might be most needed; and it can provide a
stimulus to the local economy if, as we would hope, those who spend it
will do so locally. Others will choose to save; perhaps those who least
need this rebate will help local charities."

"Taking the £50
payment and a rise in Council Tax together, residents will see a
reduction in their net payment to the Council next year of up to 10.2
per cent.

The Council must set a balanced budget for each financial year. This
year, it has identified savings of £5.4 m. But its grant from central
government is rising by only 1.75 per cent. It is therefore expecting
to increase rates of Council Tax by 3.2 per cent. But, drawing on
reserves built up over recent years from efficiency savings, it can
more than offset the increase in Council Tax through the efficiency
dividend of £50.

It plans to make the one-off payment in April, in order to achieve
maximum impact for all residents. (If instead the payment was a rebate
of Council Tax, it would be spread over ten months; and those in
receipt of Council Tax Benefit would not receive anything.)

Let’s hope they can achieve a further efficiency drive so they can
make the cut permanent and really give Wandsworth and Westminster a run
for their money. Not sure who is in third and fourth place at the

The Evening Standard reports this initiative and also another recession busting mesaure of free parking on Saturdays.


Eric Pickles has welcomed this news:

"During Gordon Brown’s recession pensioners and hard working families are struggling to meet their household bills. Rather than sit by and do nothing, Conservative councils are finding practical ways to make their lives easier. This will provide much needed help to 5600 elderly residents who receive Council tax benefit in Kensington and Chelsea."