Scene of the debate: Croydon Town Hall Pic: M Tiedemann

Croydon council’s decision to award residents a £25 rebate has described as a “desperate election bribe” by their political rivals.

Croydon Conservatives passed a new budget on Monday, which froze the council tax and guaranteed two weeks of rent relief for council tenants.

They also committed to a rebate for residents who pay their bills in full. Residents with less than £25 unpaid council tax outstanding will also get their debt written off.

A spokesperson for Croydon council explained that the plans would not have negative effect on the council’s budget: “We’re doing this because we’re able to. Every borough tries to keep the taxes as low as possible and we’re now able to stop raising the council tax.”

He also said: “We have a reserve fund which we stashed during the financial downturn, and now we’re able to pay the rebate for out of that fund.”

However, Croydon Labour party leader Tony Newman has dismissed the rebate as a “desperate election bribe”. He estimated that local residents would be given almost the same amount of money that they had to pay after Croydon council increased the council tax by 1.85% last year.

Newman suggested that it would be better to invest the reserved money in making the streets of the borough cleaner and safer. He also proposed a two year council tax freeze if Croydon Labour party wins the election in May.

The spokesperson for Croydon council said their decisions are not influenced by the upcoming election: “We just want to help our residents who have been suffering during the recession of recent years, and it just happens that now we’re able to do so.”

According to the council’s plans, Croydon taxpayers are expected to receive the £25 rebate in April. The council is also planning to sanction a two-week rent-free period in April.