Hounslow goes for maximum Council Tax increase – so where is the money going?

Image above: Hounslow Council Leader, Cllr Shantanu Rajawat

Council faces “perfect storm” of increased demand for essential services and a “broken care system”

Interview with Hounslow Council Leader, Cllr Shantanu Rajawat

The headline from the announcement of your local council’s budget for the year, the thing most people want to know, is how much more will they have to pay in Council Tax. People tend to be less interested in why, but the Leader of Hounslow Council, Cllr Shantanu Rajawat, gave an interview to local journalists to try and explain where the money goes and why they are having to put Council Tax up again this year by the maximum amount.

It was getting harder and harder to set the budget, he said, as they were in the eye of a “perfect storm” of increased demand and a “broken social care system”.

“The blame lies solely on Government. We try and do our best for residents, but Government choices penalise local government.”

The Council has a budget gap of £23.1m, which they say reflects the continuing impact of raised inflation and increased demand for essential services.

A ‘no cuts’ budget

Cllr Rajawat was adamant that his administration would not be cutting services:

“I am determined to deliver on what matters to residents, according to what we promised in our manifesto,” so the only options open to him after they have made what savings they could, he said, were to raise Council Tax and draw money from the reserve.

READ ALSO: Hounslow Council announces ‘no cuts’ budget for 2024-2025

Raising Council Tax – What do residents get for their money?

The Council is raising Council Tax by 4.99%, the maximum permitted, and taking £10.5m from reserves for core expenditure, with proposals for a further net £14.2m of other planned use of reserves for one-off items.

Last year, the Council balanced its budget in February with no budgeted drawing from the budget support reserve to balance its budget, however planned use of reserves of £6.9m from other reserves.

At the end of 2022/23, the Council’s outturn position was £2.9m over that budgeted and this year’s forecasted position is currently £3.9m, which will need to be met through reserves in 2023/24.

What will residents see for all that money they are handing over? (£2,875.90 on a Band B property, including the GLA precept).

Adult social care and special educational needs

The two areas which cost most, which councils have a statutory duty to provide, are adult social care and special educational needs. They account for more than half the council’s spending.

“People ask what they are getting for their money, but unless they are directly involved with using those services, they would not necessarily see what we are doing,” said Cllr Rajawat.

This year the Council has supported 4,100 adults with social care (including full time care in a care home) and 3,000 children and young people with special education needs. Adult Social Care is expected to cost £4.6m in ASC (£6.5m gross less £1.9m specific grants), while £1.0m will be spent on children in care, and £2.3m on the special educational needs budget.

The more visible elements of the Council’s spending are things like street cleaning, rubbish collection, recycling, highways and culture.

Recycling was on the increase, he said, and an area of expansion, an initiative introduced by his administration, was the Community Solutions team, which visits different parts of the borough in the attempt to pre-empt people going into crisis, getting into debt and potentially becoming homeless, by providing them with the opportunity of talking to advisers face to face about what support there might be for people who are struggling, in terms of hardship funds for example.

Looking for longterm solutions

The Council is also trying to address the huge drain on resources created by the inefficiencies in the social care system. When, for example, an elderly person has a fall in a care home or assisted living, where residents live independently but with support, if it is not a nursing home they have to be sent to A&E to be checked over.

There they can stay for days, sometimes weeks, until they are signed off and the social workers have checked their living conditions are fit to return to, even if they have suffered nothing worse than a bruise. ‘Bed-blocking’ in the NHS is a huge problem.

Hounslow works with Chelsea and Westminster Foundation Trust and West London Trust and Primary Care to try and improve things. Recent projects on falls prevention and supporting people with dementia are examples where the partnership is working together to improve services for Hounslow residents. There are other plans in development to explore much needed longer-term options for health and care integration.

Child poverty at 29%

Hounslow is one of the poorer local authority areas, with a child poverty rate of 29% (which I find shocking). The percentage of residents estimated to be earning less than the Living was last year was 19.5%, which depressingly is around the average for London. The borough is ranked 14 out of 32 on the poverty scale of London boroughs – we are slightly worse off than the median.

Yet the Council has just put up social rents – also by the maximum amount permitted, 7.7%, and while many tenants on Universal Credit will have this paid for them automatically, (74% Council tenants), the residents who will be the most squeezed by this budget are the social housing tenants who are working and will have to find the increase in rent and the increase in Council Tax themselves. There are some means tested discounts available.

Many houseowners are similarly looking a double whammy of steep increases in their mortgage payments this year in addition to the increase in Council Tax.

Increasing Council Tax to the maximum went some way to addressing the gap, but the Council still had to borrow from its reserve to maintain the provision of services.

Borrowing from the reserve – How bad is that?

There have been plenty of rumblings about councils going bust, so I asked whether we should be worried about the fact they were having to borrow from the reserve for the second year running.

“Reserves are for rainy days” Cllr Rajawat replied. He had satisfied the executive they had done everything they could to maximise efficiency, including losing a post from the executive board to slim down the management structure. The budget papers outline further savings in the coming year.

“We are very far off having to declare bankruptcy” he said.

The Council received an extra £18m from the government last week as part of the government’s overall Local Government Finance Settlement for 2024-25, in recognition of the huge amount of social need in the borough.

It represents a boost to the budget of 7.6%, a welcome contribution, said Cllr Rajawat, but not enough to meet the financial pressure the government is under.

The Budget will be discussed in Cabinet on Tuesday 20 February and will be set at a full Council meeting on Tuesday 27 February.

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