Council tax hike shock for London as Sadiq Khan decides to add around £40 to average bill

Mayor of London Sadiq Khan speaks to guests as he opens the Elizabeth Line from Stratford to Paddington in November 2022 (PA)

Mayor of London Sadiq Khan speaks to guests as he opens the Elizabeth Line from Stratford to Paddington in November 2022 (PA)

Sadiq Khan is set to increase his share of council tax bills by the largest amount since becoming mayor, which is explainable.

The mayor is expected to add £38.55 to average bills – an increase of 9.7 per cent in his “principle” – after the Government increases the amount local authorities can collect from residents.

This means that typical households will pay just over £434 to the Greater London Authority, mostly to fund the Met police and London fire brigade, in addition to the amount they pay to city council for local services.

The increase will be another blow for Londoners, who are already struggling amid the cost of living crisis with high inflation, rising energy bill costs and rising prices in supermarkets.

This will be the second consecutive year that Mr. Khan has set his own record for council tax increases.

It increased its bill share by 8.8 percent last year, adding £31.93 for a household paying the Band D reference rate.

The latest increase, which will take effect from April, means total annual bills will approach £2,000 for an increasing number of households in London.

The Town Hall rule was £276 when Khan became mayor in 2016.

Peter Fortune, executive vice president of GLA Conservatives, said: “Londoners will be deeply concerned about the rising cost of Khan this year as he has once again hit people with exorbitant tax increases.

“Sadiq Khan will have increased the parliamentary tax by 57 percent since he was elected, which is a tearful and unaffordable cost of living burden for many.”

Johnny Thalassites, Tory’s lead member for finance on Kensington and Chelsea council, said: “I understand the pressures we are all under in London, but I believe the increase is too much given the current challenges facing our residents and Londoners in general.”

Three counties – Kingston, Harrow and Richmond – are already charging more than £2,000 for Band D bills when the mayor’s mandate is included.

Last month, Mr Khan said his “working assumption” was an increase of £27.89.

But just before Christmas, the Government said it could raise an additional £15 instead of the £5.50 it had planned for the police and raise the remainder of its mandate by 2.99 per cent instead of 1.99 per cent.

The increase also includes an additional £20 for Transport for London – the second of three years’ tax of £20 – to help fund the cost of free travel for young people and those over 60.

Mr. Khan needs to approve his final council tax request for the 2023/24 fiscal year within the next two weeks.

When asked by Standard how he could justify an increase of close to 10 percent during the cost of living crisis, he said: “I have to be honest with the Londoners.

“If we don’t get the rules to the maximum the government tells us, we will have less money for the police, the fire department, and we will have to abolish free travel for children and free travel for over 60s.”

He called the council tax “regressive, outdated and unfit for purpose” and “one of the most unfair ways to increase revenues”.

But he said the GLA will lose Government funding in the long run if the municipality fails to raise its tax bills to the maximum allowed.

“This is combining cost maneuvering with austerity that the Government is doing,” he said. “They say not only to the regional government like me, but also to the municipalities: ‘You should replace some of the money we cut by increasing the municipal tax.’

“If we don’t increase the council tax by the amount the Government gives us discretion, the Government will punish us in two ways. They reduce the amount of income we will have next year… and at the same time [funding] foundation we have in the following years.

“So you will find that the vast majority of city councils and metro mayors have had to increase this rule by the allowable amount. I haven’t made my decision yet, but that’s the reality of recent years.”

Mr. Khan’s spending priorities include combating violent crime and violence against women and girls, and helping with post-pandemic recovery.

After a “polite” request to reappear was denied, he was legally summoned to appear before the London Assembly on 21 February to answer further questions about his budget.

Ken Livingstone holds the record for the largest city council tax increase – the £50.52 or 29 percent he imposed in 2003.

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