London boroughs on verge of going bust make council tax pledge after applying for 'exceptional' government support
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The leaders of two London boroughs struggling to stay afloat amid “extreme” pressure on their finances have pledged not to increase council tax beyond 5% in April. It comes after Newham council confirmed it had requested Government permission to raise bills by 10% as the cost of housing homeless families push it to the verge of bankruptcy.
Havering, which is predicting a budget gap of around £74million mainly due to exploding social care costs, has put in an application for emergency Government funding and loans to cover its rising debts. Leader Roy Morgon said in 2010 his town hall received £70million of Revenue Support Grant from Central Government. Today it is just under £2million.
He told the Standard: “While we could ask for council tax to be raised above the 5% ceiling we think that would not be sustainable or fair. “Why should the tax payer have to bear the burden of central cuts? We will continue to argue and make the case for fairer funding.”.
Croydon, which has collapsed into bankruptcy three times between 2020 and 2022, continues to struggle with the rising cost of services and its historic £1.4billion debt burden. Executive Mayor Jason Perry said the borough has in previous years been able to balance the books with a £38million “capitalisation direction” from Government, but this year it will not cover the budget gap.
