A central London borough could see council tax rise by up to 75 per cent after what its new leader described as 'unprecedented' cuts from central government. Westminster City Council faces having to 'make deep savings' as it is stripped of approximately £100 million over the next three years under Labour's Fairer Funding Review.
Tory leader Paul Swaddle told the borough's full council meeting on Wednesday night: 'The situation is unprecedented. There is no good outcome here. And we will have to make deep savings accordingly.'
He added: 'I want to remind this chamber what I said before the election. I was clear, the budget stored up pain for years to come and I was transparent with residents before they voted. Unfortunately reality has proven even worse than we had feared. Labour's own government is stripping Westminster of grant funding. Over £100 million over three years. The administration compounded every pressure through its own reckless choices. A 75 per cent council tax hike is what the Government's own funding assumes.'
Under the Government's plans, Kensington and Chelsea, Hammersmith and Fulham, Wandsworth, Westminster and the City of London, as well as Windsor and Maidenhead, will see the largest cuts under new local authority funding settlements. The six town halls will be exempt from the cap on raising council tax, set at 5 per cent, without a referendum from next year, meaning bills could be hiked well above the national maximum to make up shortfalls.
More residents in these areas are also expected to be hit by the Government’s new mansion tax than elsewhere in the country. 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 the 5 per cent cap.
Westminster, which the Conservatives won back from Labour at the local elections on May 7, currently sets the second lowest council tax in the country at £1,047.85 a year for Band D households. The town hall stressed that the 75 per cent hike is what the modelling produces and not yet a planned hike.
