Westminster Council is proposing a council tax increase in the next financial year as part of efforts to plug a £48mn budget shortfall.
Councillor David Boothroyd, the cabinet member who oversees the budget, said the move depended on whether the government reduces its funding for the borough which has seen its population drop according to official figures, he told the Local Democracy Reporting Service.
However, the Office for National Statistics (ONS) have accepted that the population was under-counted as it was taken during the pandemic lockdowns, and the figure could be revised “for the next mid-year population estimate position”, states a council report.
To address the shortfall in funding the council has proposed raising council tax by 4.99 percent this coming financial year and wants to hike up social housing rent by the maximum 7.7 percent, council documents reveal. A decision on the rise will be taken at a meeting of the full council on 6 March 2024.
Cllr Boothroyd said: “The council is obliged to set a balanced budget and council tax is part of that [however] we are committed to making the council tax as low as possible and we will continue with that commitment.”
The council is also looking to introduce £20mn worth of savings to tackle the budget gap it said was being caused by persistently high inflation and a spike in demand for services like temporary accommodation, which is expected to cost £38mn this coming financial year.
This includes ending the most expensive temporary accommodation like some hotels by March 2025, renegotiating contracts with service providers and investing in electric waste lorries to bring down the amount it spends on fuel. There are also plans to cut supportive living accommodation that has been left empty and reduce how often street sweepers are used during low periods.
The environment and public protection are expected to receive the most savings, with over £6mn predicted for 2024/25 and an extra £1.6mn by 2027. The biggest saving comes from an increase in EV parking charges, council documents show.
Cllr Boothroyd said these changes won’t compromise service levels and brushed off calls from the opposition to freeze council tax this year, saying he “cannot see” any other way to find the £3mn to freeze it and set a balanced budget.
He said: “The council literally has no choice but to cover that. The council has a legal duty to set a balanced budget. So, if our costs increase and we have a legal obligation to support people in temporary accommodation and try to cut costs as efficiently as possible, that’s still £38mn we could spend on other things or lower taxes with. I cannot see how the Conservatives can possibly find the £3mn to freeze the council tax and call that a balanced budget.”
Opposition leader Paul Swaddle disagrees. He said: “Labour are wasting money on pet projects and schemes, and if instead they focused on delivering services well and improving efficiency then freezing council tax would be within their grasp.”
Westminster Council is expected to set a balanced budget for the 2024/25 financial year.
It comes as the council received a 608 percent increase in the number of asylum seekers who have left Home Office accommodation applying for help and the end of the Government-supported scheme for Ukrainian refugees.
Between April 2023 and January 2024 it received 184 applications from refugees, with 30 percent of these applicants placed in temporary housing, compared to just 26 people in the same period last year.
The council also saw a 33 percent increase in applications from people who are losing their Assured Shorthold Tenancy, compared to the previous year.
Council leader Adam Hug, said: “In the heart of the capital, during a cost of living crisis, our housing supply is being pressured as never before. The number of available private rented homes is falling while rents rocket, creating a perfect storm, where local authorities are having to step in more often to prevent homelessness even as it is becoming ever more difficult to do so.
“We’ve seen the sharpest increase in demand for temporary accommodation yet over the last two years. With an estimated one in 50 Londoners now homeless we’re doing everything we can to help but councils need more effective central government support to alleviate the pressure.”
Westminster Council: Cabinet – Monday 19 February 2024.
Additional reporting by Linus Rees.
This article was amended at 7.12am on 21 February 2024 to include information about loss of private rented tenancies.
Discover more from The Fitzrovia News
Subscribe to get the latest posts sent to your email.
