Council tax set to rise in Hackney as new mayor unveils first budget

Hackney Mayor Caroline Woodley. Photograph: Hackney Council

Council tax in Hackney is expected to go up – with the Town Hall facing a multimillion-pound budget shortfall.

Against a backdrop of rising costs, increased demand and government austerity, Mayor Caroline Woodley is set to propose a 4.99 per cent hike for 2024/25 alongside her first budget.

Ahead of a meeting on Wednesday, she warned that the council’s core spending power is now 40 per cent less than it was 14 years ago – the equivalent to a £156 million loss.

The new budget comes on the “back of sustained cuts”, she said, with the Conservative government drip-feeding one-off grants.

Woodley hit out at the lack of “sustainable, long-term funding needed to plan and provide the services our residents deserve”.

The decision to propose a council tax increase during a cost-of-living crisis is “not one taken lightly”, Woodley wrote in her report, which she will present to councillors for discussion and approval.

The increase will boost council coffers by £5m.

For a resident living in a Band B property, the new rate would add roughly £1 to their weekly bill, which Woodley said is still “one of the lowest council tax rates in London”.

For working households on low incomes, the council tax discount will increase from 85 per cent to 90 per cent. This is part of a move towards Labour’s manifesto target of offering a 100 per cent discount for those most in need by 2030.

“Presenting a balanced budget in these circumstances has been a huge challenge, and we know there are more challenges to come,” Woodley added.

“We expect to have to find a further £22.5m in savings in 2025/26, rising to a cumulative £34.6m and then £52.3m in the following two years.

“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.”

Despite the challenges, spending will continue on capital programmes and frontline services, including £50m on maintaining and improving council homes, £94m for 1,000 new council homes, with work to start on 49 social rent homes and 182 completed this year.

Spending of £12.3m on anti-gangs work focuses on community gangs team and enforcement teams tackling anti-social behaviour.

Capital investments worth £55m will pay for retrofitting and housing improvements, decarbonisation of buildings, schools projects, streets and public spaces, greener vehicles, solar panels and bicycle hangers.

Projected spending of more than £85.4m on children’s centres, education support and the care system comes amid a controversial consultation to restructure services at four children’s centres, with Fernbank and Sebright at risk of closure.

Woodley said she is “proud to present an ambitious budget that not only balances the books at a time when so many councils like ours are struggling to do so, but also shows that we can continue to work together for a better Hackney in challenging times”.