Ahead of the Chancellor's Budget on Wednesday 28 October, Westminster's Conservative administration has set out what residents already know is coming from the Labour Government and has called for a fair deal for the city.
Labour's Family Home Tax (High Value Council Tax Surcharge) will disproportionately hit a significant number of ordinary households across Westminster, as Labour pursue a politics-of-envy tactic against hard-working families who choose to call the city home. The money raised will be collected locally but kept by central government, rather than helping to pay for local services.
Labour's so-called Fair Funding 2.0 review also leaves Westminster City Council facing one of the biggest real-terms budget cuts anywhere in the country, almost halving its core funding from £219 million to £119 million and leaving a £160 million gap by 2029 once inflation and demand are counted. The Conservative administration warns that this means government-imposed council tax increases and service-level cuts that punish well-run, low-tax councils to prop up councils elsewhere. This shows the Labour Government is out of touch with local realities.
The Budget is also expected to hand a share of local taxes to Mayors. The administration warns this means more money for Mayor Sadiq Khan's pet projects. Alongside the Royal Borough of Kensington & Chelsea and Wandsworth, Westminster has written to the Prime Minister to ask that devolution does not become another word for higher taxes and less local control, and that it reaches Westminster and London's other boroughs too.
Westminster sends £8.8 billion a year to the Treasury and pays nearly 10 per cent of the country's business rates bill, while serving 800,000 visitors a day on top of 200,000 residents. The Council is also challenging the Government's funding cuts under the Sustainable Communities Act 2007, alongside the Royal Borough of Kensington & Chelsea and Wandsworth.
In his letter to the Chancellor ahead of the Budget, Conservative Leader of Westminster Council, Cllr Paul Swaddle, outlined that Westminster is the engine of the country's economy, and it's only right that the government creates the economic conditions and incentives to match. Cllr Swaddle set out the administration's priorities for greater support for Westminster's high streets and the visitor economy. This included the restoration of tax-free shopping, longer Sunday trading hours in Westminster's international centres, no further tax burdens on hospitality and extended business rates support alongside wider reform allowing the Council to retain a greater share of locally generated growth.
The Conservative administration is doing its part. Last week it announced that 520 non-frontline roles will go, saving £29 million a year, including one in five senior management posts. The administration thanked those affected for their service, but said that as the Government almost halves its funding it has a duty to make the council leaner and more efficient. The Council does not expect the change to affect frontline services, and says it will make savings before touching the services residents rely on. The administration thanked everyone who took part in Budget Choices, the biggest survey any local authority in the UK has run, and said residents' priorities will shape the decisions ahead.
This contrasts with Westminster Labour, whose legacy the Conservative administration's contract review has confirmed as £56 million of waste on dodgy contracts and poor due diligence, including £19 million raided from reserves to fund a pre-election council tax freeze gimmick with no plan to pay for it.
Separately, with Oxford Street now pedestrianised, the Conservative administration has said it wants the scheme to succeed as the nation's high street, but that Sadiq Khan's poor planning has left questions unanswered on safety, access for emergency services and servicing, step-free access, and the traffic pushed into residential streets around it.
Cllr Paul Swaddle OBE, Leader of Westminster City Council, said:
"Westminster Labour wasted £56 million locally and still will not hold their own Government to account. Same Old Labour at every level: reckless with your money locally and taxing you harder nationally. A Family Home Tax that targets hard-working families, and a funding settlement that almost halves our core funding, are not what a fair deal looks like. We are doing our part, and we are asking for a fair deal for Westminster's residents."
Cllr Paul Fisher, Cabinet Member for Value for Money and Finance, said:
"The Prime Minister talks big on devolution and local spending, but his Labour Government is out of touch with local realities. Its formula punishes well-run, low-tax councils to prop up councils elsewhere, while the only thing that rings true is a handout to Sadiq Khan for more pet projects. Westminster sends £8.8 billion a year to the Treasury. All we are asking for is a fair deal that does not cost local people more or scale back their services because of the Labour Government's cuts."
