Grenfell council plans maximum tax increase amid blaze-related pressures
Kensington and Chelsea Council is to vote on proposals to increase council tax by the maximum 2.99% for the majority of the borough from April.
The council dealing with the aftermath of the Grenfell Tower fire is planning to increase its council tax by the maximum amount as it continues to face pressures relating to the blaze.
Kensington and Chelsea Council (RBKC) is to vote on proposals to increase council tax by the maximum amount of 2.99% for the majority of the borough from April due to “rising costs and inflation”.
There are also plans to top up charges with money ring-fenced for social care by the maximum 3% in order to meet “significant additional expenditure” for Grenfell-related adult social care.
Much uncertainty exists around the cost of undergoing support for former residents and others affected by the Grenfell Tower fire Chris Buss, council director of finance
The proposals were set out in a financial report approved by the leadership team on Monday evening.
It will go before the full council for a vote on March 7.
If accepted, it will be the second increase in council tax since it was frozen in the 2009/10 financial year.
The report, by director of finance Chris Buss, noted: “Much uncertainty exists around the cost of undergoing support for former residents and others affected by the Grenfell Tower fire.
“These combined with other liabilities which may arise with respect to this tragic event represent a major and persistent risk to the council’s finances.”
The report said that, while most costs would be met through reserves, some would be ongoing and it “is not unreasonable that these costs should be met from general ongoing taxation”.
It added that the rise would be “not dissimilar to that faced by most residents in other London boroughs”.
Councillor Elizabeth Campbell, leader of Kensington and Chelsea Council, said: “Like many other councils across the UK, our funding is decreasing and our costs are increasing.
“We will be asking for an extra 3% to invest in support for those who are disabled, elderly, at risk, or in poverty.
“This extra social care funding will also contribute to the future Grenfell response – a unique health challenge for this borough and its residents.”
We will be asking for an extra 3% to invest in support for those who are disabled, elderly, at risk, or in poverty Elizabeth Campbell, council leader
She added the team “did not take this decision lightly” and that payments for a band D property would rise by £47 a year – less than £1 a week.
RBKC estimates that Grenfell will cost around £88.5 million in revenue over the period to March 2019.
The local authority estimates it will have spent around £51 million in its response to the fire as of March 31 – £21.534 million from its reserves.
It forecasts Grenfell spending over the next financial year will cost £36.753 million, £34.485 million of which will be drawn from its reserves.
It is budgeting a further £8 million per year for 2019-20 and 2020-21.
This does not include the £235 million committed by the local authority to rehousing victims, survivors, and families from the wider North Kensington area.
The forecast means RBKC is set to become the fifth poorest London borough in terms of its reserves compared against its net revenue spending. In 2017, it was the richest.
Its reserves are projected to more than halve by April 2019, with around £62 million estimated to be in its coffers at that point, compared to £171.270 million just months before the fire.
In December, a review by the Chartered Institute of Public Finance and Accountancy (CIPFA) of the council’s medium-term financial strategy found that would not reduce reserves to an “inappropriate level, given the uncertainty and risks still outstanding”.