How will the council spend our tax money?
OWEN SHEPPARD FINDS OUT WHAT’S IN STORE FOR HAMMERSMITH AND FULHAM IN 2020-21
NEARLY every spending decision Hammersmith and Fulham Council makes this financial year will come back to the evening of Wednesday February 26, when its annual budget was decided.
It was a night of long and barbed speeches from Labour and Conservative councillors, where you wish you’d had a penny for every time one of them said “millions”.
To save you trawling through it all, we’ve made a list of the most important announcements, which will shape the borough in 2020-21.
The biggest announcement was a £4.5 million investment in a new “gangs unit”, and £5.5 million of new money to create two new youth centres in White City and Sands End. Council leader Stephen Cowan (Labour) told the meeting details will be unveiled next week in a paper that will also set out plans for having “the greatest number of law enforcement officers onto the street”.
“When Tony Blair said ‘tough on the causes of crime, as well as tough on crime’, he got it absolutely spot on,” said Mr Cowan.
Referring to the Conservative government, he continued: “If you’re going to cut the fundamental aspects of what makes society work, how can you then make the claim you’re the party of law and order.
“We’re going to be tough on crime in this budget.
The council has much less money now than in 2010. Like most London boroughs, Hammersmith and Fulham has had a 40 per cent cut from its central government funding – its biggest source of income.
Despite the belt-tightening, he added: “We have not had a single protest about cuts to services… because we haven’t cut any services.”
He went on to say his team had made the council “more like Google and a modern business than an old fashioned bureaucracy”.
Hammersmith and Fulham will continue to have the third-lowest rate of council tax in the country, beaten only by lower tax rates in Westminster and Wandsworth.
Wednesday’s budget confirmed the previously reported 3.99 percent tax rise which takes effect in April. Half of this will, by law, have to be spent on adult social care services.
Residents in Band D properties will end up paying £792 a year, though this is lower than what residents were paying 10 years ago, following several years of tax cuts under the previous administration.
The total council revenue will be £63.8 million.
A separate increase will see extra revenue sent to the Mayor of London and spent on the Met Police.
Last year the council began paying for free breakfasts for primary school children. In January it launched a programme of free lunches for all pupils at “two of our most deprived” secondary schools, Fulham College Boys’ School and Wood Lane High School. Last year the council said £3.7m funding had been dedicated to funding the free meals over four years. Some of this will come from the council’s Section 106 fund (explained below).
The sudden closure of Hammersmith Bridge was ordered after micro fractures were discovered in its pedestals during a one-off “structural integrity review” of the grade II*-listed landmark. Mr Cowan told Wednesday’s meeting repairs are underway, but there’s “still a lot of money to be paid, it could cost at least £120 million.”
He paid tribute to his colleague, councillor Wesley Harcourt, who ordered the structural review.
“If it wasn’t for Wesley ordering the structural integrity review of our 133-year-old suspension bridge, I have every confidence there would have been a disaster.”
Conservative leader Councillor Andrew Brown criticised the budget for not having any detail about how those repairs will be funded, but Labour says the government should fund the repairs.
The government is devising a new Fair Funding Formula which it will use for deciding how much money it gives to councils across the country.
Mr Cowan referred to research by renowned think tank The Institute for Fiscal Studies, which said areas with “relatively high need and a low council tax” will get less money under the new formula.
“You don’t need to be Sherlock Holmes to see we’re completely in the frame of that,” Mr Cowan said. “Walk around our poorest areas and see people in the greatest deprivation... That’s who they’re coming after when they lift money from Hammersmith and Fulham.”
Meanwhile, research by the County Councils Network, predicts that under the Fair Funding Formula, rural areas will get on average a nine per cent increase in funding per year, whereas inner London will get a 24.9 per cent cut. Mr Cowan called the figure “staggering”.
Services that help children in schools with special needs and disabilities, from autism to dyslexia and anxiety, depend on funding from their local council.
Hammersmith and Fulham’s “high needs” budget had a cumulative shortfall from the government equalling £13.8 million in 2018-19. This is expected to rise to more than £20 million by this time next year.
A vital source of revenue for London councils are deals they make with property developers. Known as Section 106 agreements, they allow councils to demand money that can be spent on things that ease disruption or “harm” major redevelopments can cause.
With several major planning applications underway in White City and elsewhere, Mr Cowan boasted that £685 million of Section 106 money now lines the council’s coffers. “Six hundred and eighty five million pounds, up from £320 million just under two years ago,” Mr Cowan said, adding that a “kick ass approach” has been taken in negotiations with developers.
This huge pot is also reserved for one-off investments in street improvements, or for building new council housing where a developer has been permitted to build more expensive housing.
This year’s budget report refers to a review of the council’s finances in 2018-19 by auditors Grant Thornton.
It said: “The Council’s reserves level is of concern as there doesn’t appear to be sufficient cushion to weather the ongoing financial challenges that the council will face over the medium term due to reductions in central government funding.”
The balance for the council’s reserves will stand at about £68.8 million on April 1 2020, down from £113 million in 2018. It forecasts a overall drop to £45.5 million by the start of 2023-24.
Mr Brown told the meeting: “Reserves can only be spent once, and the forecast for 2023 identifies a tightening of the council’s finances that will need careful management.”