• Oops!
    Something went wrong.
    Please try again later.

Sadiq Khan forced to defend biggest ever London council tax increase

·3-min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

Sadiq Khan has been forced to defend plans to impose his biggest increase in council tax bills since becoming mayor.

This includes £20 a year for the next three years to help ease the financial crisis at Transport for London – though the first year’s money will be held in City Hall’s coffers and not spent for 12 months, it emerged on Wednesday.

Susan Hall, leader of the GLA Conservatives said it was surprising that Mr Khan was asking Londoners to pay extra from April for TfL yet hold the money in reserves “though it’s needed now”.

Mr Khan wants to increase benchmark Band D bills by £31.93, which will mean an average London household will pay almost £400 a year for services run by City Hall – up 8.8 per cent on current levels.

This will take total Band D bills to about £2,000 a year once the cost of borough services is added – at a time Londoners also face higher transport costs, soaring utility bills, the 1.25 per cent social care levy and higher income tax bills after the tax-free threshold was frozen.

Mr Khan, under questioning from the London Assembly’s budget committee on Wednesday morning, said the annual Government settlement for City Hall – including funding for the Metropolitan police and London Fire Brigade - was “disappointing” as it only amounted to a one-year deal.

“We were hoping for a multi-year deal,” he said. Mr Khan’s council tax increase includes an extra £10 for the Met and £1.93 for the fire brigade, to help it tackle safety problems in tall buildings exposed by the Grenfell Tower tragedy.

Adding £20 to council tax bills is expected to raise £172m a year for TfL. The levy has been introduced after the Government told Mr Khan that TfL had to break even by April 2023.

Mr Khan, asked why the extra cash would not be spent by TfL immediately, said: “We are expecting the Government to assist us in 2022/23 and not in 2023/24. Hopefully we will be out of the pandemic by 2023/23 and passengers will be coming back.”

Last year Mr Khan ended up with a “windfall” in excess of £100m after initial estimates of the revenue likely from business rates and council tax proved pessimistic.

Asked how he would spend any unexpected revenues this year, the Mayor said he was aiming to be “prudent rather than cavalier” and added: “The climate emergency and the [economic] recovery will be the focus of any additional revenues that come in.”

Mr Khan is expecting to have to increase bus and Tube fares by 4.8 per cent, probably alongside the 3.8 per cent increase in national rail fares that the Government has delayed until March. TfL’s latest pandemic bail-out runs until early February, with TfL bosses still hoping for a long-term funding settlement.

Caroline Russell, a Green member of the London Assembly, said some of the poorest Londoners would be disproportionately affected by the hike in bills.

She said many Londoners were in effect “paying twice” for TfL’s financial crisis - through higher council tax and higher fares.

Mr Khan said: “I’m on record saying I think the council tax is regressive. I think it’s in need of urgent reform.”

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting