Mayor says Hackney ‘rising to challenge’ amid ‘perilous’ strain on local authorities

Mayor Woodley at the Britannia development. Photograph: Hackney Council

Hackney’s mayor has said the borough is “rising to the financial challenge” amid warnings over the “perilous” state of local government finances across England.

On Wednesday, a new report highlighted that, whilst demand for council services continued to spiral, central government proposals to keep local authorities afloat had so far been “short-term and unsustainable”.

The findings, published by the Public Accounts Select Committee, came a week after Chancellor Rachel Reeves outlined the Treasury’s spending plans for different government departments over the coming years.

This included an average year-on-year budget increase of 1.1 per cent for the Ministry of Housing, Communities and Local Government (MHCLG), along with a £39bn support package for affordable housebuilding.

The review also promised a decade-long “social rent settlement”, which would see council housing rents rise in line with the Consumer Price Index, plus one per cent.

Responding to the spending review, Mayor of Hackney Caroline Woodley said it was “so welcome”.

The commitments, she said, would help support her ambition to build 1,000 new social rent homes in the borough, while also giving the Town Hall “greater certainty” in managing its housing stock.

In light of this week’s report, the Citizen asked the mayor if she thought the Chancellor’s decisions showed a more long-term and sustainable approach to funding local councils.

Mayor Woodley said: “Ministers have heard the call for investment I’ve raised on behalf of Hackney, and in partnership with colleagues across London Councils and the Local Government Association.”

When asked how the Town Hall planned to cope with rising service demand amid its looming restructure, she said the council was “rising to the financial challenge locally”.

“We are developing ambitious plans to change how we work, cutting costs whilst improving services for our residents,” she said.

“With budgets stretched, protecting Hackney’s most vulnerable residents remains my priority.”

The mayor added that she was “pleased that ministers had listened to local councils” in their decision to extend an accountancy loophole for authorities’ special educational needs and disabilities deficits.

This mechanism had allowed councils to write-off their overspends on higher needs, but was slated to expire in March 2025 – leaving many councils fearing a “cliff-edge moment”, she said.

“This confirmation helps us plan for the long term.”

The mayor’s statement to the Citizen came on the same day the government announced it would prolong the arrangement for another two years.

Some council leaders and experts welcomed the news, while adding that many local authorities still faced the threat of having to reduce spending on essential services.

The Select Committee’s report, published on Wednesday 18 June, warned that many councils were at risk of “effectively going bankrupt” if the loophole expired next March.

Its inquiry also concluded that MHCLG did not know if the funding it gave to local authorities was well spent, and there were signs that the quality of council services was declining.