Westminster Conservatives have warned that Labour's funding reforms will leave the borough over £100 million worse off, forcing difficult decisions on council tax and local services. The Council says Westminster is being unfairly penalised despite generating billions in business rates and serving hundreds of thousands of daily visitors.
This article by Katherine Gray is published on My London and you can read it here.
London borough guarantees cuts to services so asks residents what they most want to keep
Westminster City Council said it will see its funding from national government cut by over £100million over the next four years
Westminster is set for a gruelling period of council tax rises and cuts to services in order to make up for £100million less in national government funding.
The local authority will be asking residents which services they value the most to decide what should be axed. One of the first things to go has been universal free school meals for children in Key Stage 3.
The austerity measures have been introduced in response to the national Labour government's Fairer Funding Review, which will change the way council grants are calculated. For Westminster, this means a 50 percent reduction in their funding over the next four years.
The Conservate administration has been vocal about the "unprecedented" nature in these cuts to the borough's funding.
Government estimates have suggested that Westminster's council tax may have to rise by 75 to 100 percent in order to compensate for the reduction - although the council has made no final decisions on this.
Councillor Paul Fisher, Cabinet Member for Value for Money and Finance, said that there was "no scenario" where the borough wouldn't have to introduce cuts to services and council tax increases.
He said: "There will have to be cuts and I'm being very explicit about that. I'm using the word cuts because I want to be straight with residents in Westminster and that's why we're asking them what they want to keep most. And of course, the implication is - where can the council make savings?"
Cllr Fisher assured residents that statutory services, such as within adult social care and education, would be ring-fenced from the austerity measures. However, the recent cut to universal free school meals is one example of the types of services which could be on the line.
"No service the council provides is free. Someone somewhere down the line, including some of the most underprivileged in our borough, will have to pay for it in the form of tax," he said. "So we've always got to think of this as a set of weighing scales that need to be balanced carefully."
One of the most costly services provided by Westminster is temporary accommodation, which increasingly takes the form of hotels.
Cllr Fisher said that the "tough decisions" on who gets temporary accommodation within the borough will need to be made.
People across London are increasingly being forced to leave their local area by councils who find it cheaper and easier to house them further out of the city - in some cases up to 275 miles away.
'Stark contrast to the promises made'
Normally, councils have to hold a referendum if they want to increase council tax by more than the 5 percent yearly threshold. Due to the exceptional circumstances, Westminster is one of a few London boroughs where this will not be the case for the next two years.
Westminster Tories have been vocal in calling these "Labour's cuts", as well as slamming the financial decisions of the previous Labour administration.
"I'd love to make sure we're working on a cross party basis to achieve the best for the residents of Westminster but, and this is really significant, the first thing the Labour group need to do, and I have not seen it so far in the public statements that they're making, is acknowledge that this problem is a consequence of their national government's decision-making and their decision-making. We need a degree of humility from the Labour group," said Cllr Fisher.
Despite serving as a councillor in the previous Labour administration, Cllr Fisher does not take any responsibility for the position which Westminster now finds itself in.
The Cabinet Member, who is from South Wales, crossed over to the Tory party in April 2025, which he says was after the "real problem budget" they delivered last year.
Leader of Westminster's Labour Group, Councillor Ellie Ormsby, said: "Nobody disputes that Westminster faces a significant financial challenge. The Fairer Funding Review has been discussed for years, but successive Conservative governments repeatedly delayed reform, leaving councils facing a funding cliff edge instead of a managed transition.
"Cllr Paul Fisher admitted at Cabinet that 'there is no circumstance in which we do not have to make cuts to services, and also council tax rises'. That is a stark contrast to the promises Westminster Conservatives made at the election just two months ago to 'keep council tax low', 'protect frontline services' and 'fight for a fair funding settlement'.
"If this resident engagement exercise on the Budget is to have any credibility, residents must be told how their views will shape decisions. After scrapping universal free school meals for Key Stage 3 pupils without consulting families in a borough where 43% of children live in poverty, the Conservatives have already shown they are willing to make the most vulnerable pay the price. They have a lot to do to convince residents this won't simply rubber-stamp decisions that have already been made."
The Fairer Funding Review explained
The Fairer Funding Review is changing the way that national government calculates the amount of money it gives to local authorities. The government says this is to more fairly distribute central funding across councils in England.
Historically, Westminster has been more reliant on government funding as it has some of the lowest council tax in the country.
Cllr Fisher said that this was an "unwritten rule" because the borough gave the government so much from business rates.
"Although we only have 200,000 residents in Westminster, we have 800,000 people visiting Westminster on a daily basis. "So we have lots of additional costs that most other other councils do not face," he said.
"We generate, as I said before, £2.7 billion worth of business rates revenue for the national government. And I think that those two issues, the cost and the revenue, need to be reflected in council tax."
Other London boroughs, such as Kensington and Chelsea, are also set to be affected by the government reforms with the neighbouring authority projecting a £108m loss over four years.
