Redbridge agrees on council tax hike

Redbridge Council has approved a council tax increase of almost five percent in a bid to balance its books next year.

The tax rise will see the annual bill for band D properties rise by about £111, or £9.30 a month, from April.

Even with this council tax increase and an increase of 13 per cent in the amount of government funding it will receive this year, the council plans to dip into its reserves to cover planned spending of £216million.

Deputy leader Kam Rai, who oversees the borough’s finances, said the budget this year has been a “tougher challenge” than usual.

He added: “We’ve always had to tackle austerity and, as the census, shows we have an extra 13,000 people in the borough.

“This financial year in particular we’ve had to deal with inflation, which was sitting at 12.6 per cent in September.

“While we know residents have been impacted greatly by the cost-of-living crisis, so has the council.”

In the budget report, approved by cabinet last week, council tax will increase by 4.99 per cent, which is the maximum amount allowed without holding a referendum.

Residents will see an overall increase of about six percent, factoring in the almost ten percent rise in the amount paid to the Greater London Authority.

Rents for council-run housing will also go up by seven percent and many service charges will increase by the inflation rate of 12.6 per cent, as of September last year.

Some charges to council tenants and leaseholders will increase significantly, with communal electricity doubling to about £180 per year while heating and hot water will triple to £1,261 per year.

New or higher-than-inflation charges that will hit residents include £70 for a virtual citizenship ceremony, which was previously free, and a yearly charge of £300 to transport children over the age of 16 with special needs.

Redbridge Council expects to receive £214m next financial year, a third of which will be government funding, while the remaining two thirds will come from council tax.

This will leave it with a budget gap of £2.3m, meaning that balancing the books will require dipping into money set aside for specific purposes, known as earmarked reserves.

Cllr Rai said that using earmarked reserves goes “against the grain” of the council’s strategy, which is to increase its savings.

He pointed out that, as well as losing about 55 per cent of government funding since 2010, the council also receives significantly less per resident than some other London boroughs.

While Redbridge can spend about £812 per person, the best-funded London borough has about £1,490.

Cllr Rai said the council has planned £10.5m in “efficiency savings” as a result of inflation, growth in demand for council services and limited increases to government spending.

The bulk of these savings will be through cutting the cost of adult social care placements, reducing the costs of looked-after-children and a review of the council’s pension fund payments.

Each year the council’s most senior finance officer is required to sign the budget off as “robust”.

Corporate director of resources Maria Cristofi has signed off the budget but warned that repeated use of earmarked reserves is “unsustainable” and can have “extremely serious” impacts for councils that do so repeatedly.

From April this year, the council’s earmarked reserves will be £55m – seven million pounds less than the same time the year before.

The senior director said that the council’s general reserves, which are held for unavoidable cost increases, are £21m.

This amount is “adequate” but only on the basis that further changes to the budget are “tightly controlled”.

In her report, Cristofi said that senior councillors are likely to be asked to make “increasingly difficult decisions” in coming years to ensure this is an “one-off occurrence”.

She added: “One of the most significant risks continues to be the delivery of agreed savings and the level of transformation taking place across the council to deliver the associated budget savings.

“Essentially, costs, if unmanaged, are increasing, while future funding is unclear.

“The council has therefore made and will need to continue to make difficult decisions in future budget rounds to remain within the resources available.”

The budget is due to receive final approval after a vote by all 63 Redbridge councillors on February 23.

Josh Mellor

Local Democracy Reporter