Investment into housing and young people will be generated from a council tax increase and using reserve funds in Hackney Council’s new budget
The council has announced its budget for the next financial year, which includes a sharp hike in council tax to 4.99%, against a background of cuts to local government, a rampant cost-of-living crisis and increased demand for services.
Here are the main points:
Council set to rely on reserves
Like all local councils, Hackney is dealing with a long-term lack of investment, meaning that the money it has available to spend is 40% less in real terms than 14 years ago.
This – combined with rising costs for residents and an increased demand for social care – means Hackney Council has continued to eat into its reserve funds.
In doing so, the council says it has managed to overcome a £22 million funding shortfall to balance the budget.
However, it also says it will need to make a further £52m in savings over the next three years. It is unclear whether future cuts will need to be made or whether the council will continue to use its reserves to offset this.
Hackney Mayor Caroline Woodley said: “We aim to meet as much of this shortfall as possible through transforming our services and doing more for less.
“But there will inevitably be some hard choices to make, and we will make these in a way that measures, understands and minimises the impact on our residents.”
Council tax to increase by 4.99%
The major headline from the budget is a sharp rise in council tax – by almost 5% from April 2024. This increase will add around £1 to the average weekly bill in the borough.
But the council defended the hike, saying the borough’s council tax was still one of the lowest rates London, and that the amount raised – around £5m – would help to fund key public services.
There is also some relief for households on low incomes, as the council has raised the maximum council tax discount from 85% to 90%.
Additionally, the budget has taken aim at property owners who do not live in the borough, by extending its Empty Property Council Tax Premium.
This means the owner of any home that has been empty for over 12 months will be charged double the current Council Tax rate from April 2024. The council say they are looking to apply this to second homes from April 2025.
Continued commitment to invest in capital programmes and frontline services
The council says it has committed to continue investing in social services, net zero schemes and young people.
These investments include:
- £94m towards a 1,000 new council home target for 2026, to offset the current housing crisis.
- £55m on decarbonation and electric vehicle projects – driving Hackney towards a net zero emissions goal.
- £16m on maintaining 58 parks, as well as seven sport and leisure centres, as part of a pledge to improve the borough’s physical and mental health.
- £85.4m on support services for young people – to promote child safety and create “a more inclusive and high performing education system.”
