Key Points:
- Waltham Forest Council has approved a 4.99% council tax increase, set to take effect in April.
- Residents in Band D properties will pay £100 more annually as a result of the hike.
- Council leader Grace Williams stated there was “no responsible alternative” to protect essential services.
- Neighbouring councils Redbridge and Newham are also increasing council tax, with Newham proposing a significant 8.99% rise.
- The 4.99% increase is the maximum allowed without a public referendum, comprising 2.99% for council services and 2% for social care.
- Waltham Forest faces a major financial crisis, with officials warning a Section 114 notice (indicating effective bankruptcy) could be issued within 18 months to two years.
- Temporary accommodation costs are a major financial strain, with 1,590 families currently housed in hotels and B&Bs.
- Low-income residents will face higher council tax payments, as support has been reduced.
- The council has scrapped free parking across the borough, aiming to generate £1.5 million in additional revenue.
- The full council is expected to approve the budget this week, finalising the tax changes from April 1.
Why Is Waltham Forest Increasing Council Tax?
Waltham Forest Council has confirmed a 4.99% council tax rise from April, citing financial pressures and the need to protect key services.
The council’s cabinet, led by Labour leader Grace Williams, approved the increase at a meeting on February 20. Williams stated that there was “no responsible alternative” to raising tax, given the financial challenges facing the borough.
How Much Will Residents Pay After the Tax Hike?
The increase means Band D property owners will pay an extra £100 per year. The 4.99% rise is the highest possible without requiring a public referendum, consisting of a 2.99% increase for general council services and a 2% increase for the social care precept.
How Does Waltham Forest Compare to Other London Boroughs?
Neighbouring councils are also implementing tax increases as part of their annual budgets:
- Redbridge Council has also backed a 4.99% rise.
- Newham Council has proposed a significant 8.99% hike to address severe financial shortfalls.
What Financial Challenges Is the Council Facing?
Waltham Forest is grappling with a £23 million budget deficit, leading to cuts and restructures across council services.
At a scrutiny meeting, resources director Rob Manning warned that the council could be forced to issue a Section 114 notice within two years if decisive action is not taken. A Section 114 notice is issued when a council’s income falls below the cost of its statutory obligations, effectively declaring it bankrupt.
What Is the Impact of Temporary Accommodation Costs?
One of the biggest financial strains on Waltham Forest Council is temporary accommodation, a challenge faced by many London boroughs. Currently, 1,590 families are housed in hotels and bed-and-breakfasts due to a lack of affordable housing.
Deputy leader Ahsan Khan highlighted a rise in families entering temporary accommodation but a decline in those leaving, leading to prolonged stays. In some cases, families have been stuck in hotels for over a year.
According to London Councils, London boroughs collectively spend £114 million per month on temporary housing.
What Additional Revenue Measures Has the Council Introduced?
To address financial shortfalls, Waltham Forest Council has:
- Reduced council tax support for low-income residents – thousands who previously paid as little as 15% of their council tax will now contribute up to 43%.
- Scrapped free parking across the borough, with the aim of generating £1.5 million in additional revenue.
What Happens Next?
While the budget has been approved by senior councillors, it still requires final approval by the full council. A vote is expected this week, and if passed, the council tax increase will take effect from April 1.
