Islington is the latest council to create a hardship fund for residents struggling with price hikes.
The town hall is setting aside £1m as a hardship fund designed to help working families on low incomes who are facing rent rises.
It said the pot of money was a “one-off” fund to support residents. The council will open applications for the fund before the end of March.
The scheme will have to be approved by the full council later this spring when it looks at the budget in full. It will be discussed at this week’s Executive of senior councillors on January 12.
Neighbouring Camden council set up a £2m cost of living crisis fund with payments of up to £500 per household in need.
Meanwhile, the City of London’s charitable arm, City Bridge Trust, has made a £1 million donation to the London Community Foundation to aid its cost-of-living emergency grants programme, Together for London.
Islington is capping its housing rent rises to 7 per cent and proposes a 4.99 per cent council tax increase for the next financial year. This includes a 2 per cent increase to pay for adult social care.
This is the maximum increase allowed by law before the council would have to ask residents what they think in a referendum.
Town hall number crunchers said this means people living in Band D homes, will pay £1.26 more a week, whilst those Band D residents paying just 5 per cent will see a 6p a week increase.
This is before factoring in the council tax contribution to the Greater London Authority for services including fire and police.
The Labour-run council is also renewing its 95 per cent council tax support scheme for low income families.
The Green opposition party said it would like to see this increased to 100 per cent for those most hard hit by the cost of living crisis.
Pensioners on pension credit will not have to pay any council tax.
The council’s executive member for finance Diarmaid Ward said the rent hike “will add to the financial pressures of the council’s tenants, with residents in the private rented sector also facing rising rents. ”
The council also expects £4.4m from the government’s household support fund. It is using a £567,000 windfall as its share of the profits from the Enfield waste incinerator and recycling centre with extra cash to help people struggling with energy bills.
It is also gave 1,100 vulnerable families an extra £100 support payment in December and is injecting £50,000 into the network of community buildings which have opened their doors as Warm Spaces this winter.
Some of the cash is also helping its SHINE team give energy saving advice and its IMAX – income maximisation team – spot benefits and financial support residents could be claiming.
It is also giving £150,000 to help business in Islington.