Residents in Camden will see a 4.2 per cent increase in their council tax this year – the maximum allowed – but the worst off will not have to pay anything.
The borough’s Labour-run council approved the increase and said it is needed to meet the cost of the pandemic and extra demand for services, particularly follows years of austerity.
It warned of a £35m-£40m black hole in its finances by 2025/26.
The council tax hike includes an increase of 1.9 per cent to support council funding, with an extra one per cent increase in the levy for adult social care.
Camden said, overall, council tax will provide £126m to help fund its services.
Residents in Band D homes will pay £1,791.93 a year – a rise of £72.46.
Since 2010, the council has faced cuts from central government, and said by the end of 2023 it will have seen a total of £197m slashed from its budget.
The Conservative opposition leader Oliver Cooper criticised the council tax hike.
He told the full council meeting that the government finance settlement meant “this council can freeze council tax like Barnet and Westminster”.
Cllr Cooper said money could be raised by “scrutinising the budget without hitting the pockets of local residents”.
These include increased parking enforcement, which could raise £500,000, and turning unused parking spaces on estates into paid-for parking and empty garages into paid-for storage, which the Conservatives predict could yield £1.1m a year.
Cllr Richard Olszewski, the cabinet member in charge of finance, said Covid put an extra £28m squeeze on finances last year, adding to the £68m in 2020/21 – the year the pandemic broke out.
He said: “We have unfortunately little choice but to increase the council tax by the maximum amount.”
He said the budget tackles “twelve years of a relentess onslaught of tax-cutting”.
This year’s budget includes an extra £1m designed to help 5,000 more residents affected by poverty, “whether they are on benefits or not, to help with food ,electricity, gas, clothing and debts”.
There’s also a 100 per cent council tax reduction scheme for those most in need – which will cost the council £29m.
At the same time, demand for adult social care has increased and is predicted to cost £3.2m for a further 172,000 hours of home care between April 2021 and the end of this year.
The money spent on young care leavers moving into adult social care is also predicted to be £0.9m in the next financial year.
The council is putting another £7.2m into adult social care this year.
Cllr Olszewski said: “There is still a good deal of uncertainty regarding the council’s medium-term financial position, both due to the ongoing need to
support residents and businesses affected by the impact of the pandemic.”
He said it is also unclear how much the government will give it in the future, and whether or not council tax and business rates collection will recover to pre-pandemic rates.
It is predicted that there will be a drop of £8.7m in business rates income this year.
The Conservatives’ alternative budget also included setting up more area community councils, putting “budgets in the hands of local communities, from traffic management to planning, to have a real say,” according to Cllr Andrew Parkinson.
They also wanted to see weekly bin collections restored.
Liberal Democrat Cllr Tim Simon said the Labour budget was one of “missed opportunities”.
His party proposed a £100k community fund to tackle climate change locally, a review of waste policy after residents complained of too much litter on the streets and more work to tackle homelessness.
It also proposed spending £145,000 of the We Make Camden budget to give young people more of a voice in the borough.
Green councillor Sian Berry wanted a £100,000 Resident Empowerment Fund along with £1m to support the voluntary sector in recovering from the pandemic.
The party also proposed bringing more services in-house, raising the
diesel surcharge and speeding up the introduction of a corporate parking levy for the 2,500 company parking spaces in Camden.
Cllr Berry said the proposals were “common sense, and sooner is better than later when it comes to resilience”.
The amendments were rejected and the Labour budget – the last before May’s council elections – was voted through.