Hounslow Council Tax goes up 5%

Images above: Hounslow House; Cllr Shantanu Rajawat, Leader of Hounslow Council

Liz Truss “44 days of chaos” torpedoes Council’s budget plans

LB Hounslow has announced an increase of 4.99% to this year’s Council Tax, the maximum raise the Council can make. They have also had to borrow from their financial reserves to protect core services because, they say, of the financial impact of Liz Truss and Kwarsi Kwarteng’s “44 days of chaos.”

Liz Truss resigned after 44 days as Prime Minister after her Chancellor Kwasi Kwarteng announced the biggest raft of tax cuts for half a century, using more than £70 billion of increased borrowing.

“When Kwarsi Kwarteng stood up, [to make the Budget speech] the interest rate was at 3.5%” Council Leader Shantanu Rajawat told The Chiswick Calendar. “The next day they were at 6%.”

The impact of doubling the cost of borrowing, together with high inflation and huge increases in energy costs has meant the Council has had to make a wholescale re-evaluation of what they can achieve.

“It’s been a year of two halves. We were elected in May with a manifesto we want to carry out and we still have those ambitions but since the 44 days of chaos we have had to reassess fundamentally what we can do.”

They only received details of this year’s financial settlement two days before Christmas, and built in to that assessment is the assumption that councils will increase Council Tax by 5%.

“Where we thought we were at a balanced position, we are not any more.”

Image above: Hounslow Director of Public Health Kelly O’Neill making an announcement during the pandemic; Hounslow Food Box

Digging into the financial reserves

Referring to Croydon Council, which declared bankruptcy in November, and Slough, which did the same in July 2021, Cllr Rajawat said:

“We are not a Croydon or a Slough. Thankfully we hold reserves. We have looked at every option to close the budget gap. We are having to increase Council Tax by the maximum and we are having to dip into the reserves to smooth things over.”

He said the Council had made £3m savings from service reviews but they were not going to be able to grow key frontline services in the way they wanted. “We need to generate income” he said “and every single option needs to be on the table.”

They are taking £30m from the reserve to fund council services in 2023-24, which represents 15% of the total.

Image above: Cllr Shantanu Rajawat (centre right) and Cllr Katherine Dunne (centre left) opening a new bespoke housing complex for disabled adults in August 2022

Local authorities face ‘existential crisis’

Local authorities warned in November they faced an “existential crisis” caused by the massive funding shortfalls. The Leaders of two Conservative run councils, Hampshire County Council and Kent wrote a strongly worded joint letter to Rishi Sunak in which Kent leader Roger Gough, and Hampshire leader Rob Humby, said:

“The problem is simple: the additional money that we can raise from council tax and business rates barely covers the normal inflationary pressures that we face each year. This leaves significant growth, particularly in adults’ and children’s social care, totally unfunded.”

Three-quarters of Councils are expected to increase their Council Tax by the maximum 5%, according to research from the County Councils Network. So far 84 out of 114 councils to have published 2023-24 budget proposals plan to increase Council tax by 4.99%, with all but one raising tax for next year.

Hounslow Council’s Leader Cllr Shantanu Rajawat said they were unable to plan ahead because they were still getting single-year settlements from the government. They issued their Corporate Plan for 2022-26 in June 2022 but they have been unable to budget beyond the 2023-24 financial year.

“Long term planning is severely lacking” he said.

Talking about the Government and Hounslow’s ambition to achieve a net zero, carbon neutral position, he said it would take investment of £15bn to achieve that. To put this in perspective, their spending budget was £1.3bn a year. They needed Government support to achieve net zero.

Image above: Breaking ground for a new housing project, former Hounslow Leader Steve Curran with current Deputy Leader Katherine Dunne

Hounslow stands by £1 billion investment to build Council homes

LB Hounslow announced in January it would be investing £1 bn to build 1,000 new Council homes by 2026 in response to the current housing crisis. This commitment still holds, the Council says. The budgeting for this includes £160m which the Council has secured from the Greater London Authority.

Hounslow has seen a stark increase in the demand for housing support since 2020, through job losses during the pandemic, rising costs and inflation creating greater strain on household finances and house prices 12 times more than the average residents’ earnings.

There are currently over 6,000 families on the Council’s housing waiting list, many waiting on average of three years for a permanent home.

The Council has been working with internet service providers Community Fibre to improve connectivity rates in the borough and tackle digital exclusion. It announced in October that over 14,200 properties and community spaces had already benefitted from faster internet connections and a further 3,400 properties would benefit by the end of 2022.

The offer has been promoted through a new initiative, the Community Solutions team which holds open sessions at various locations in the borough. The team aims to identify and solve problems before they turn into crises, offering advice on a range of topics including mental health, employment and skills and financial support.

Cllr Rajawat told us the outreach initiative was successful, in that they were seeing fewer crisis calls coming in as a result of the team’s work. He said the Council’s ‘warm spaces’ initiatives involving public buildings such as churches and libraries would continue, offering not only warmth but someone on hand to provide advice and help.

Image above: Terraced houses in Chiswick; photograph Anna Kunst

Council Tax increase “well below the current rate of inflation”

The Council’s budget proposals will be discussed by the next Council meeting on Tuesday 28 February. The average Council Tax bill for residents is set to increase by £2.06 per week, of which £1.32 per week is the Hounslow Council’s proposed increase and the remainder the proposed Mayor of London precept increase.

‘If approved, the rise will remain well-below the current rate of inflation’ say the Council.

Cllr Rajawat said:

“If the proposals are accepted, the average resident will see an increase in Council Tax, and whilst our council tax remains well below the national average, I fully appreciate this is an added cost for residents at a time when household finances are already stretched.

“To address this, we are still offering one of the most generous Council Tax support schemes in London for eligible residents, including a further reduction of up to £50. Through close collaboration with our partners, we already have an extensive package of support to help every resident navigate the current economic challenges and I encourage anyone with concerns about their finances to visit one of our cost-of-living marketplace events to find help.”

Hounslow needs to crack down on “waste and inefficiency” say Conservative opposition

Responding to the publication of the budget, Leader of Hounslow’s opposition Conservative group, Peter Thompson, issued a statement saying:

“Whilst we understand all councils are in a difficult position due to the economic challenges being faced around the world, the question Hounslow Labour needs to ask itself is whether it has cracked down on the waste and inefficiencies in the council before coming cap in hand to residents.

“Local people are about to be hit by a triple whammy of Hounslow council tax increases, increases in Sadiq Khan’s council tax precept, and the introduction of ULEZ to the western part of the borough – all despite the council receiving the largest cash and real terms funding increase since 2010.

“We will continue to hold Labour to account to fight against Sadiq Khan’s unfair raid on working people and ensure local people are getting value for money from their local authority.”

Examples of “questionable value for money” the Conservative group cites include ‘special responsibility payments’ – the payments made to councillors who are in Cabinet or chair committees for taking on extra responsibilities over and above those of being an ordinary councillor.

They say the Council currently pays 75% of councillors the additional “Special Responsibility Allowance” worth close to half a million. The report of the Independent Panel on the Remuneration of Councillors in 2018 recommended no more than 50% of councillors should receive an SRA. In Ealing, by comparison, 55% of councillors receive an SRA (mainly because there are two main opposition parties), and the total bill is £357,000.

READ ALSO: LB Hounslow leader justifies huge increase in councillors’ allowances planned for this year

The Conservative Group points out that the Lampton Group, a company wholly owned by the Council, set up in 2012 to trade local authority functions in order to generate financial surpluses and return them to the Council, is currently running at a £2 million deficit.

They say also the Council currently has roughly 500 empty council house properties, each of which costs the Council in lost rent.

Read more stories on The Chiswick Calendar

See also: Hounslow Labour’s 2022 election manifesto

See also: Hounslow’s Corporate Plan

See all the latest stories: Chiswick Calendar News & Features

Support The Chiswick Calendar

The Chiswick Calendar CIC is a community resource. Please support us by buying us the equivalent of a monthly cup of coffee (or more, if you insist). Click here to support us.

We publish a weekly newsletter and update the website with local news and information daily. We are editorially independent.

To subscribe to the weekly newsletter, go here.