Generous grant settlement for Hammersmith and Fulham Council – so will Labour honour their tax cut pledge?

The Government has announced a generous grant settlement to Hammersmith and Fulham Council. When all the revenue sources are added together the Council will £199.68 million for its General fund spending in 2015/16. This compares with £209.43 million for 2014/15. So that is a cut in the total “spending power” of just 4.7 per cent. Those figures assume the Council tax is frozen. That would actually mean increased revenue from it as the base in wider (there are more homes). So the revenue would rise from £51.37 million to £51.88 million. The main Government grant will be £103.57 million.

If the Council tax is frozen or cut there will be an extra £0.62 million in Government grant in recognition of this.

Labour were elected on a pledge to cut the Council Tax – and to do so at a faster rate than was managed under the Conservatives. That would imply a cut of over three per cent (which was the typical level achieved under the Conservatives). So if they keep their promise and include a Council Tax cut of, say, four per cent that would mean extra savings needed of £2.07 million – or around one per cent of the total budget.

That would be perfectly achievable and I hope that pledge is honoured. If it is then it will show the important success in shifting the parameters of debate in this borough. After the election the pledge was modified “to reduce taxes” but not specifying that this would be at a faster pace. There was also a Labour pledge to cut parking charges – which they described as a “stealth tax”.

Their undertaking  to cut spending by £20 million a year would allow a much bigger Council Tax cut – even after absorbing the lower Government grant – but I would be surpirsed if that is delivered.

One longer term problem could come with the Labour council’s hostility to allowing new homes to be built. The New Homes Bonus for 2015/16 will be £5.7 million. There is a time lag between planning approval for new homes and the new homes actually being built. But eventually the New Homes Bonus grant will fizzle out under the current planning policies. There could also be some trouble with the £20.86 million Public health grant. This is supposed to be “ring fenced” specifically for public health improvements. The council has raided it for funding voluntary groups – which was already being paid out of the Council’s general budget. I’m not sure the rules will allow this.

The council’s budget is due to be published on Monday January 5th.

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