The need to raise council tax

At this time of year, the Council has to declare its thinking about the budget for the municipal year to come; 2017-18 will be the seventh year in a row in which our grants from central government will decline.

Between 2010-11 and 2016-17 our budget shrank by about 20 per cent in ‘real’ terms (that is, allowing for inflation). But things have not fallen apart. Instead, our services have stood up surprisingly well to the challenge of austerity, thanks to our survival strategy of sharing, saving and stewardship.

Through sharing the management of services with our neighbours, through old- school savings and efficiencies and through more dynamic stewardship of our property portfolio, we have mostly managed to maintain the scope and quality of our services and thereby, the quality of life here in Kensington and Chelsea.
In 2017-18 we need to find a further £8 million in savings or income. And we expect to have to find similar amounts in 2018-19 and 2019-20 as well.

But the capacity of our strategy for delivering more savings and more income is now diminishing.

Though £8 million is smaller than the £12 million we had to find in 2015-16, it was proving just as hard to come up with budget proposals that delivered the full amount. Until that is, we remembered something, a power so rarely used it had almost been forgotten: we can put the council tax up.

The Royal Borough council tax is one of the very lowest in England and it has not gone up by so much as a penny in eight years which is a remarkable fact really, given the pressures of price rises, our ageing population and loss of grant.

What we are therefore considering is an increase of just under two per cent. This would raise about £1.5 million in 2017-18 and spare us some quite difficult decisions.

In times of hardship, all councils are tempted to reduce those of their services that are in some way class-leading. The reason is that one can more easily defend a switch from the good to the merely okay, one can even liken such a switch to swapping from Waitrose to the perfectly acceptable Sainsbury’s.

We’ve done a tiny bit of that ourselves in Kensington and Chelsea as when we cut our bin collections to a mere twice-a-week.

Nevertheless, several of our services remain genuine leaders in class. A couple of examples: we are now more or less the only council in the country still meeting the ‘moderate’ care needs of vulnerable adults and we are one of the small minority in London still paying council tax benefit that covers 100 per cent of council tax bills.

These are the sort of leads we are extremely loath to surrender. If agreed, an extra £1.5 million raised in council tax would help us avoid doing so, at least in 2017-18.

The Council’s budget and council tax will be finally set at the annual budget meeting on 8 March 2017.