Westminster Council Consults on Service Cuts Amid Funding Crisis

Westminster Council has begun consulting its 200,000 residents regarding potential service reductions as it grapples with an 'unprecedented' £100 million decrease in central government funding over the next three years. The local authority is seeking public input on which services residents would least like to see reduced or eliminated, or if they would prefer a substantial increase in council tax to maintain current service levels.

Projected Budget Shortfall and Tax Implications

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A consultation document issued by the council warns of a projected £160 million budget shortfall by 2029. Without intervention, the council states that council tax would need to rise by 200% to cover this deficit. Paul Fisher, cabinet member for finance, emphasised the importance of resident responses, noting that decisions made in the coming year will have long-term implications, including the level of any proposed council tax increase. He described the government funding cuts as stark, leaving no easy options.

Mr Fisher highlighted that Westminster provides over £2.5 billion to the national government through business rates, a contribution he feels is not recognised in the funding cuts. He also pointed out the unique challenge of serving a large daytime population of 800,000 people in addition to its 200,000 residents.

Council Tax Rates and Exemptions

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Currently, Westminster has the second-lowest council tax in the United Kingdom. A Band D property in the borough pays £1,047 annually, which includes a £510 City Hall precept. The council is one of six local authorities, alongside Kensington and Chelsea, Hammersmith and Fulham, Wandsworth, the City of London, and Windsor and Maidenhead, that will see the most significant reductions in their funding settlements under Labour's Fairer Funding Review.

These six councils are exempt from the standard 5% cap on council tax increases for the next two years. This exemption allows them greater flexibility to raise bills above the national maximum to address their financial shortfalls. Ministers have stated these authorities have historically low bills. Residents in these areas are also more likely to be affected by the government's new mansion tax on homes valued over £2 million, which is scheduled to take effect in April 2028.

Next Steps

The consultation period will inform the council's budget planning for the upcoming year. The outcome will determine the extent of service cuts or the proposed level of council tax increase.