Ealing council tax rise likely after ‘inadequate’ government settlement


Full Council will vote on whether to approve the draft budget report when they next meet on Tuesday, 2 March.

The government has left local authorities with a funding settlement that assumes that council tax and the social care precept will go up. Without raising council tax, Ealing Council would have to consider substantial cuts to critical frontline services, relied on by the most vulnerable in society, to plug the gap.

People who live and work in Ealing are invited to sign up for a Zoom budget Q&A session ahead of the full council meeting where they will have the opportunity to find out more about the draft budget and put their questions to councillors. The online session will take place on Wednesday 24 February at 7pm. A Zoom account is not required to take part.

The proposed council tax increase is part of a package of measures that will put in place a balanced and sustainable budget, despite ongoing COVID-19 pressures and a 64% cut in Ealing’s government grant between 2009/10 and 2020/21. Like all local authorities, Ealing Council is legally obliged to balance its budget.

Local residents on low incomes and who are struggling financially may be entitled to help in paying their bill through the Council Tax Support scheme. Residents can apply online. More than 25,400 Ealing households are currently in receipt of help.

Cabinet will also consider a new proposal to extend full council tax relief to care leavers. And owners of properties that have been empty for more than 10 years could be asked to pay a 300% premium on top of the standard council tax. This move will help bring disused properties back into use, creating more homes for local families; a key Future Ealing priority.

The council started this year’s budget discussions with fears about how years of funding cuts followed by the COVID-19 pandemic would affect services. To date, the financial impact on Ealing Council from COVID-19 is £77.1m.

After long delays, with the council managing a £20m in-year shortfall at one stage, central government has still not covered Ealing’s COVID-19 costs and lost revenue for this year, with a current shortfall of £9m in income received. Although more funding is expected the council cannot rule out having to use reserves to balance the books this year. Fears remain about increased future demand for essential services (especially children’s services) and the ongoing effect of the pandemic.

In addition, the Government has decided to cover just 75% of the losses from council tax and business rates non-payment incurred during COVID-19. This leaves the council with at least a £4m per year shortfall in future years. This lost income, and the lack of clarity over the Government’s long-term funding for councils, contributes to a projected £52m gap in Ealing’s budget by 2024/25 which could hit services.

The council has identified £7m in savings for next year; most of them one-off. Most of the proposed savings will be achieved through further Future Ealing efficiencies, including reviewing council contracts, and savings associated with the continued roll-out of the council’s online My Account service.

Amongst the efficiency savings is a proposal to close Acton Reuse and Recycling Centre, leaving the larger Greenford Reuse and Recycling Centre open. The move to consolidate its recycling operations to one main site would bring Ealing in line with other London boroughs. Residents living east of the borough who normally use the Acton site will be able to use the site at Abbey Road, in Park Royal.

Despite the ongoing pressures, Ealing is continuing to invest in crucial frontline services that protect the community, including children’s services and our pandemic response. In doing so, the council is recognising the particular impact the pandemic and lockdowns is having on the borough’s children and families.

Councillor Bassam Mahfouz, cabinet member for finance and leisure, said: “The COVID-19 pandemic has highlighted the importance of well-funded, good-quality public services.

“Before Christmas, we held some budget engagement sessions for business, residents and the voluntary sector. Those who attended the sessions, shared my fears about the financial impact of COVID-19 on council services and our residents, especially coming as it did after years of cuts to our government grant and steep rises in demand for our services. I’m looking forward to giving an update at our follow-up session on Wednesday, 24 February.

“Residents told us that their top priority was that we protect the most vulnerable and we have set out to do that by continuing our Council Tax Support scheme and are extending the support we provide to care leavers. We are also making significant investments to deliver on our pledge to deliver 2,500 much-needed genuinely affordable homes. Through our economic plan for recovery, Greenprint, we will also continue our efforts to support residents gain jobs and support the local economy get back on its feet with support for businesses trying to stay afloat.

“With the government failing to stump up more cash to avoid increasing council tax the revenue raised from the council tax increase, together with our Future Ealing savings, means we are able to protect the services for our most vulnerable, while also investing in ambitious plans to build genuinely affordable homes, resurface our roads and pavements, and invest in our services for young people across the borough.

“Unfortunately, the government’s funding settlement has left us with no option but to propose raising council tax. I know this news comes at the end of a very tough year for many people which is why we are looking to continue to help the most vulnerable. However, this is harder to do every year. The continued long-term uncertainty of our funding, a global pandemic and increased demand for some of our most complex and expensive services means that this budget represents a postponement of even more difficult decisions rather than a long-term solution to our financial problems.”

Councillor Julian Bell, leader of Ealing Council, said: “This year’s funding settlement has tied our hands, leaving us in the impossible position of increasing council tax or cutting crucial services at a time when local people are relying on them more than ever. All this is doing is passing the costs on to residents at a time when many can least afford it.

“The past 12 months has been a year unlike any other and COVID-19 has placed huge demands on all of us. It has shone a light on the very best in our communities, and at the same time taken a huge personal and financial toll on many of us.

“Our proposed 2021/22 budget will continue to support our most vulnerable residents, but we are, once again, working to a short-term and inadequate funding settlement from government. Councils led the way in the COVID-19 response and the value of what we do was clear to see. Government must next put in place a sustainable and appropriate funding settlement that allows us to plan for the long-term and continue to provide services that really matter to local people and which they don’t have to pay for through council tax increases”.

The full cabinet report is available on the Ealing Council's committee web pages

Attendees must register in advance for the budget Q&A meeting.