Council tax rise as town hall makes £25m cut to budget

Islington Town Hall (credit Alan Ford/Wikimedia)
Islington Town Hall (credit Alan Ford/Wikimedia)

Islington Council budget includes investment to help meet green targets, reports Ed Sheridan, Local Democracy Reporter

Islington Council is reducing its budget by £25m for the 2021/22 financial year, but will invest in its effort to reach net-zero carbon within a decade.

A rise in council tax of almost 5% is set to be agreed, but will not be enough to prevent £25m in budget cuts needed because of “the impact of central government funding cuts over the past decade and rising costs and demand for council services,” according to a budget report.

The budget will be debated by all councillors next week, but members of the policy and performance scrutiny committee last week welcomed the budget being delivered “under difficult circumstances”, while calling for further consideration to be given over its impact on residents affected by the “digital divide”.

Committee members also expressed concerns over the “unfairness” of council tenants facing increased charges to park on council estates. Owners of larger electric vehicles will not face comparable increases.

Addressing last week’s committee, the council’s executive member for finance, Satnam Gill, said: “We don’t think this budget will have any adverse impact on the digitally excluded. We will do as much as possible to ensure that people who have digital difficulties can access the council and services as easily as before.

“We will continue to run our contact centre to ensure that people who do not have online access can still get council services.

“We are spending £80m in a new-build programme, about £17m to tackle the climate crisis including £8m on electrifying the council’s fleet, £6m on people-friendly streets, continuing to operate our ‘We Are Islington’ response line and programme, and we will be boosting our resident support to help those who are particularly badly hit by Covid-19.”

The Labour-run town hall faced an estimated budget hole of £25.75m in the 2021/22 financial year, but this has been “balanced” by the new proposals. In the medium-term period, there remains a three-year shortfall of £34.2m that will need to be plugged in future budgets.

As part of its Covid-19 response over the last year, the council received £9m from the government’s £1.55billion grant scheme for local authorities, but councillors are not expecting to receive any further pandemic funding in the year ahead.

Other “significant” cost pressures predicted in the budget include adult and children’s social care, homelessness, and an increase in demand for mental health services as a result of the pandemic.

Council tax will be increasing by 4.99% overall, although 3% of this is specifically for adult social care. Identical increases are already planned for the subsequent two years.

Of the £25m, around £14m are new savings proposals, with the rest agreed in prior budgets. Proposals include an increase in the pay and display diesel surcharge, from £3 to £5 per hour for short stays; a decommissioning of a temporary accommodation scheme; and a reduction of the need for two carers for domiciliary care service users.

The borough will also see further learning disability reviews, transitions and additional savings from learning disability placement reviews, as well as a renegotiation of learning disability out-of-borough placements. There will also be a review in mental health services of residents with care packages based out of the area.

Both substance misuse and sexual health services will see budget reductions of £150,000, with £80,000 found in the termination of funding for a hospital-based alcohol liaison role.

An additional Covid-19 contingency of £5.5m has been set aside, with town hall chiefs expecting that this will be needed in the coming year.

New investments, meanwhile, include a £16m spend on electrifying the council vehicle fleet, with a programme to develop electric charging infrastructure; £9m will spent on the ‘People Friendly Streets’ initiative; £1m on ‘School Streets’ schemes; plus a £3m retrofitting scheme for housing estates to reduce carbon consumption. There will also see be a £2m “significant expansion” of cycle parking and hangars, while another £2m will go on solar panels and LED lighting on the town hall’s corporate estate.