Hackney mayor labels government Fair Funding Review a ‘Tory stitch up’ as council tax rise announced

Mayor Phil Glanville. Picture: Polly Hancock

Mayor Phil Glanville. Picture: Polly Hancock - Credit: polly hancock

Council tax will rise again in Hackney to help plug a £30million funding gap – and the town hall says it could lose another quarter of its funding thanks to a government “stitch up”.

Hackney Council bosses have drawn up the budget plans for the next financial year as it deals with £140m of cuts from government since 2010. Per household that's a loss of £1,459 a year - the most of any London borough.

A report states the council wants to raise council tax by 3.99%, something that is "never an easy decision" but will raise £3.3m to help cover a the huge budget gap.

The average household will pay less than £1 a week more, and Hackney will still have one of the lowest rates in the capital.

"Local government has heard that 'austerity is over' before," said mayor Phil Glanville. "We also know that despite promises in speeches by government ministers, or figures on the side of a big red bus, that spending cuts that started a decade ago continue today."

Mr Glanville said additional cash from the government's Local Government Financial Settlement and 2019 Spending Review were one off fees "barely covering the gaps in existing funding in services like social care and SEND."

He said even after the council's cuts it needed to find another £19m by 2022.

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Front line services will continue to be protected, while the council says it will also shield vulnerable people from the impacts of austerity.

The budget focuses on making the borough fairer, with the council tax support discount for the poorest families resetting to 85%. School workers will be brought in-house, £7.3m will be spent on making Hackney safer through the Integrated Gangs Unit, an expansion of the CCTV network and funding more police.

Another £13m will go on youth services, including at the four youth hubs and six adventure playgrounds, and after declaring a climate emergency last year, the council will "significantly fund" projects including £5m on making all the street lights energy efficient, thus reducing electricity consumption by 60%.

In the next 12 months Hackney Council will spend £322m on capital projects like a new learner pool at London Fields Lido and refurbishing Stoke Newington Library and Hackney Museum. It will spend £70m on improving its 30,000 council homes, £7m on maintaining its parks and leisure centres and £5.8m on its libraries.

Mr Glanville said the additional costs caused by increased demand impacted thousands of people in Hackney "whose lives have been made harder and harder by the rise in work poverty; a failure to regulate the private rented sector; the hostile environment; a labour market that all to often leaves those in work in poverty; universal credit; and wider welfare reform."

He added: "This impacts the ability of the council to respond and compounds the impact of austerity, for instance we spent £1m per year on temporary accommodation in 2010. We now spend £13 million, and if you add the cost of housing benefit, this figure is closer to £50m."

The government's Fair Funding Review could also see factors like deprivation and homelessness chucked out in favour of "remoteness" when it comes to the government grants - a move the Local Government Association Labour group have called a "smash-and-grab raid" by the Tories on deprived inner-city Labour councils in favour of Tory-voting shires.

The council says it could see Hackney lose another 25% of its funding, which would see the predicted budget gap of £18m in 2023/24 double to more than £36m.

Mr Glanville said: "It is a typical Tory stitch-up - making local government from across the country fight for government scraps, rather than give all councils the funding they desperately need.

"I hope the new chancellor recognises that - rather than be beholden to unelected advisors in Number 10 like he is - local government should have more control of finances, taxes and powers to better serve our communities and not have to go cap-in-hand to national governments."