Westminster City Council: Council tax could be doubled in central London authority as it admits there are ‘no easy options’
A central London authority could double council tax to avoid cuts to services following the government’s decision to redirect funding to poorer areas.
Westminster City Council has warned it faces “tough and very difficult choices” as a result of changes made as part of a “fair funding” review of council allocations.
This review will halve the annual central grant, falling from £219 million to £119 million in the 2029-30 financial year.
The Conservative-run council, which has raised more than £2.5 billion in business, argues the Government’s calculations overlook the borough’s high poverty rates and social challenges.
It also claims the review failed to take into account the serious pressure its one million daily visitors put on services.
Westminster, along with five other councils, was given two-year “funding realignment powers”, allowing it to raise council tax above the standard 5% threshold.
Westminster said this effectively signaled that the Government was awaiting authority to significantly increase council tax to make up for lost funding.
The council, which has one of the lowest average council tax levels in the country, will consult residents this summer about what services they value most and their willingness to pay higher bills.
Cabinet member Paul Fisher said: “The government assumes we will now increase council tax by 75-100% to cover our emergency budget deficit.
“While we have not yet decided on council tax levels for next year, this new financial environment is unprecedented and presents us with very stark and very challenging choices with no easy options.”
He added that “comprehensive efficiency and transformation plans” would not close the budget gap in the coming years, so residents will be asked if they are prepared to pay more council tax.
Mr Fisher added: “As we continue to fight for the residents of Westminster and take our case to the Government, we must be honest that there is no easy option here and no horizon where we won’t have to make savings.
“We charge the second lowest council tax in the country, provide affordable services and raise more than £2.5bn from business rates – yet we are still being forced to effectively make huge savings through potential cuts and expected council tax increases.
“Even if we doubled our council tax we would still be one of the lowest in London and the lowest in the country.”
A Labor source said: “The fair funding formula is about directing money to areas in Britain’s poorest communities right across the country.
“I don’t think even Westminster council would think they’re at the top of that list.”
Despite funding reforms, councils in England face a £7bn funding black hole over three years – more than the current council spends on roads, transport, homelessness and housing services combined, the Local Government Association said.
Group D properties in Westminster are currently charged annual council tax of £1,047.
The other four councils given the power to reorganize funding are the City of London, Hammersmith and Fulham, Kensington and Chelsea, Wandsworth and Windsor & Maidenhead.
In total, seven municipalities were given permission to increase council tax to a certain level.
