London's Conservative council leaders have accused the Prime Minister of imposing a "Burnham penalty" on council tax, stating that cuts to central government funding are forcing them to raise local taxes or significantly reduce services. Three council bosses from Westminster, Wandsworth, and Kensington & Chelsea have written to the government, arguing that a revised funding formula, which redirects cash to more deprived areas, unfairly burdens councils with historically lower tax rates.
According to the Conservative leaders, this situation is not a matter of local decision-making, as the need for substantial council tax increases has been factored into their budgets by the central government to compensate for reduced funding. They contend that this practice "devolves council tax rises and government cuts," with any additional revenue from these hikes not retained by local authorities or the Mayor of London.
Wandsworth council is reportedly preparing for a potential increase of up to 160% in council tax, which would be the largest rise in England's history. Local Conservatives attribute this looming increase to a 40% reduction in government funding and the spending plans of the previous administration. The leaders are urging Angela Rayner, the Local Government Secretary, to conduct an urgent review of the funding changes, which they claim will negatively impact residents across London and the South East.
A government spokesperson stated that the reforms aim to rectify an outdated funding system by directing funds to areas with the greatest need. The spokesperson added that the government is committed to making the system fairer for all taxpayers while protecting councils during this transition and preventing any abrupt financial shocks.
Six councils, including the City of London, Hammersmith & Fulham, and Windsor & Maidenhead, have been granted two-year powers to increase council tax beyond the standard 5% threshold, a measure the three Conservative leaders feel their areas have been specifically targeted for.