Council Tax Reduction (CTR) schemes are a textbook case of how fragmented policymaking creates injustice. Since 2013, support for low-income households has shifted from a single national benefit to around 300 localised schemes.
The result is a postcode lottery: two families in near-identical circumstances can face vastly different bills simply because they live on opposite sides of a council boundary.
Fragmentation has become the defining feature of Council Tax Reduction. Each local authority has been left to design its own scheme, creating a patchwork of rules, thresholds and exclusions that bear little relationship to need. What started as an experiment in localism has hardened into territorial injustice: your entitlement depends less on your household circumstances and more on the happenstance of where you live.
Local Government Reorganisation (LGR) will, by default, strip out some of this fragmentation. Dozens of district councils, and their dozens of separate CTR schemes, will disappear, replaced by single schemes across new unitary footprints. That alone is progress: fewer schemes means fewer arbitrary boundaries shaping the fortunes of people in poverty.
But it won’t end the postcode lottery. It will simply shrink its scale. The real question is whether LGR will be treated as a tick-box exercise to rationalise administration, or as a chance to take meaningful steps towards fairness.
What Good Policymaking Looks Like
Good policymaking is not about getting a scheme over the line with minimal fuss. It is about clarity, fairness, and protecting people who are most at risk.
In the context of Council Tax Reduction, that means recognising that complexity is the enemy of good design. Schemes that are rushed, stitched together from competing legacies, or negotiated only on the basis of cost end up confusing households and creating more arrears, not less.
Good policymaking also starts with a clear purpose. Is the scheme meant to raise revenue for the council, or to reduce poverty for residents? Too often, those aims are blurred.
When financial survival for councils is the overriding priority, the result is unaffordable minimum payments, higher recovery costs, and exclusions that undermine the basic principles of social security. Local Government Reorganisation could be the opportunity to strip that back and restate what CTR is for: making Council Tax affordable for those who cannot pay.
Finally, good policymaking is about trust. Residents should be able to see how decisions are made, and why. They should know that their entitlement is based on need, not where they live. CTR consultation will be one of the first statutory consultations for new unitary boundaries. It is an opportunity to tell your residents what their new council is about and what equitable support means in practice.
The Risks if Councils Get This Wrong
If new schemes are rushed or built on the lowest common denominator, the result will be more hardship, not less. Councils under pressure to merge by April 2028 may be tempted to lift a scheme from one district and apply it across the board, regardless of whether it fits the new population. That approach risks stripping protection from groups who currently rely on it, driving up arrears and undermining trust in the new authority before it has even begun.
There are also practical dangers. Revenues and benefits teams will need to merge processes and systems*, while managing legacy schemes and transitional protections for residents who stand to lose out. Without careful planning, these technical hurdles can translate into real financial harm for low-income households left facing sudden, unaffordable bills.
The worst outcome would be for LGR to entrench the postcode lottery in new forms; schemes harmonised downwards, protections watered down, and new unitaries starting life with a policy that punishes the poorest. That is why the decisions made in the next two years matter so much.
The Opportunity if Councils Get It Right
Setting aside the wider flaws in the localisation of welfare policy, while we continue with this system of localised support for Council Tax, LGR offers a rare opportunity to make it less fragmented and more just. By bringing district schemes together into a single unitary scheme, councils can reduce the worst excesses of the postcode lottery and create more consistency across larger populations.
A well-designed scheme could reduce the churn and confusion that drive arrears, align more closely with Universal Credit, and give residents confidence that their entitlement is based on need, not on the accident of which district they live in. It would also strengthen trust in the new authorities at the very moment they need it most, showing that reorganisation is not only about structures, but about people.
Conclusion: From Fragmentation to Fairness
Council Tax Reduction has become the clearest example of how fragmented policymaking creates injustice. Local Government Reorganisation will not end that injustice but it will reduce the sheer scale of fragmentation.
The real test will be how councils use this moment. Safe-and-legal harmonisation is the minimum. The opportunity is to go further: to design simpler, fairer schemes that reduce arrears, protect people in poverty, and build trust in the new authorities.
If you are working on Local Government Reorganisation and want to make sure your new CTR scheme reduces, rather than entrenches, geographical injustice — get in touch.