London boroughs facing the largest council tax rises in Britain are set to launch a legal process challenging the Government's decision to slash their funding. Wandsworth, Kensington and Chelsea and Westminster councils are expected to officially appeal the significant cuts.
Leaders meet to discuss challenge
Leaders of the three boroughs met with shadow minister local government minister James Cleverly and Tory party chairman Kevin Hollinrake on Wednesday to discuss challenging the new settlements, it is understood. A public consultation official announcement is expected to come as soon as Friday.
It is anticipated that the boroughs will exercise a legal power laid out in the Sustainable Communities Act 2007, which gives councils the right to submit proposals to the Government asking for the removal of legislative and other barriers that prevent them from improving the sustainability of their local area.
Funding cuts and council tax hikes
Under Labour's Fairer Funding Review, the three Tory-led councils, along with Labour-led Hammersmith and Fulham, the City of London and Windsor and Maidenhead, will see the largest cuts to funding settlements. Wandsworth is understood to be proposing raising council tax by as much as 160% as it faces losing £84 million a year in funding by 2030.
Westminster has warned it will have to hike bills by up to 200% unless significant cuts are made to services. The six town halls are exempt from the cap on raising council tax, set at 5%, from next year, which means residents' payments will need to rise well above the national maximum to make up shortfalls.
Wandsworth's political context
Wandsworth council is expected to announce the challenge after a crucial by-election, due to take place on August 27, which could decide which party definitively runs the local authority. At the most recent polls, in May, the Tories secured 29 seats on the council, placing the party one short of the 30 required for a majority. Labour has 28 councillors. But Lizzy Dobres, who represented Trinity ward for the party, quit her role shortly after the election to take up a new job that is "politically restricted".
The borough has argued that along with the cuts, it is tackling the highest planned borrowing levels in its history and "reserves that are forecast to run out within three years if urgent action is not taken".
Reactions from both parties
A source familiar with the challenge said: "The Conservative administration inherited a precarious financial situation. The perception that any council is wealthy enough to weather a 40% cut to its government funding is severely misguided. The question is does the council roll over and accept Burnham taking from inner London Councils to pay other councils? I'm glad the councils aren't rolling over without a fight."
Wandsworth sets the lowest council tax rate in the country at £1,020 for benchmark Band D homes, including the £510 City Hall surcharge. A Wandsworth Conservatives spokesman said: "The previous Labour administration in Wandsworth failed to stand up for local residents, choosing instead to roll over while the Labour Government cut 40% of Wandsworth's funding. That decision has real consequences for our borough and unfairly punishes Wandsworth residents. Wandsworth Conservatives will always stand up for our residents. That is why we have officially launched a challenge to the decision taken by the Labour Government. We will not sit back and accept a funding settlement that leaves residents worse off. We will continue to fight for a fair deal for our borough and the funding it deserves."
A spokesperson for Wandsworth Labour said: "Wandsworth Conservatives are gripped by internal civil war and are not up to the job of running the council. Wandsworth has zero external debt and the highest reserves of any neighbouring borough. They need to sit down with a spreadsheet and get on with the job instead of playing politics and misleading local residents."
It comes after Westminster Council wrote to 200,000 residents as it plans next year's budget in the wake of an "unprecedented" £100 million drop in central government funding over the next three years. The town hall is asking residents what services it should cut amid warnings of 200 per cent council tax increases if nothing is done to curb spending.
Ministers have argued that the six local authorities have had "historically very low bills" and local leaders will be given "flexibility" for two years to increase them above cap.
