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19.12.16

Khan looks to raise London council tax for first time in nine years

The mayor of London Sadiq Khan is looking to raise council tax for the first time in nine years in order to support the Metropolitan Police (Met) following the cut in local government funding last week.

The London Assembly Budget and Performance Committee’s Pre-Budget Report, which scrutinises Khan’s draft 2017-18 budget, found that the mayor is proposing to increase the police precept element of council tax bills by 1.99%, adding £4.02 to the average Band D property.

This will aim to counteract a fall in central government funding for the Metropolitan Police of £17.4m compared to the last financial year, the committee said.

Gareth Bacon, chairman of the Budget and Performance Committee, said: “The mayor has decided to increase council tax next year to help fund the Met Police. He will have to explain to the Assembly – and to Londoners – why this is the best way of dealing with the cut in government funding announced last week.

“We also have concerns over TfL’s fares income, which could be less than expected. So far, there are no affordable housebuilding targets, and it is now being proposed that the Met’s performance measures should be set at the borough, not London, level.”

The report also revealed that TfL plans to increase its borrowing in order to finance its business plan, making its level of debt more than £12bn by 2020-21. Interest costs will also increase by over 50%. TfL’s fare incomes could also dip unless congestion is reduced on London’s roads, the committee warned.

The London Legacy Development Corporation (LLDC), which oversees the Queen Elizabeth Olympic Park, is continuing to make operating losses, with the cost of the London Stadium increasing by another £51m this year.

The underperformance of both mayoral development corporations (MDCs) is a risk for Khan, as the report blamed this on a lack of leadership in the wake of the chairs of both MDCs resigning earlier this year. The report also raised concern about London’s Growth Deal 3 funding not being enough to support Khan’s planned regeneration and economic development projects.

“Some issues with this year’s budget process need to be addressed, including a significant lack of transparency and the absence of any proposed performance measures,” Bacon continued.

“It’s important the mayor ensures that high standards of transparency are introduced and improved throughout his term in office.”

The pre-budget report made 12 recommendations for Khan, including urging him to state whether he will introduce annual targets for delivering 90,000 new affordable homes by 2020-21 with 50% of homes being ‘genuinely affordable’, one of his main election pledges. The committee advised that targets should be in place for the 2017-18 first quarter monitoring report.

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