Sadiq Khan forced to defend London council tax hike

LONDON mayor Sadiq Khan has been forced to defend plans to impose his biggest hike in council tax bills since assuming office, reported Evening Standard.

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 was reported.

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, the report added.

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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.

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

According to the report, the mayor, under questioning from the London Assembly’s budget committee, said that 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.

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 Khan that TfL had to break even by April 2023.

“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," Khan was quoted as saying by the newspaper, when asked why the extra cash would not be spent by TfL immediately.

Last year 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”.

“The climate emergency and the [economic] recovery will be the focus of any additional revenues that come in," he added.

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.

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

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