A North London council has warned the “perfect storm” of high inflation, a growing demand for services, and reduced government funding will see residents facing tax rises and further cuts to public services next year. Brent Council must find another £8m in savings, as councils up and down the country battle to deliver a balanced budget.
A consultation on Brent’s draft budget proposals is currently under way, which, when approved, will shape how the council spends taxpayers’ money next year. The report notes that the seriousness of the financial position it is facing “can’t be understated”, having already made around £210m worth of cuts since 2010.
Council leader, Cllr Muhammed Butt, has promised to be “open and transparent” about the challenges the borough is facing. He told the Local Democracy Reporting Service (LDRS) that some of the decisions the council has to take to balance next year’s budget are going to be difficult.
Brent is by no means alone with this; it is a similar situation facing a majority of London councils, which together have to make up a £400m shortfall in order to continue delivering the same levels of service. Around 20 per cent of councils across England believe that the 2024 budget will lead to cuts that are visible to the public, according to a survey carried out by the Local Government Information Unit (LGIU).
In Brent, the council has revealed that the most visible cuts are likely to come from the Adult Day Care services – specifically the Millennium Day Centre, which provides facilities for adults with physical and learning difficulties. Staff and buildings are the biggest expenses for councils, meaning this could also mean the sale of assets and staff redundancies.
Cllr Butt said: “We just don’t have any low hanging fruit, that’s long gone. Now it truly is going to impact on how we deliver services. We have had to make some of the most horrific choices in order to protect the most vulnerable.”
A visibly upset Cllr Butt said the decisions “[go] against every fibre of who I am and why I came into politics” but concedes that they have to be made or else essential services, and the people who rely on them, “will suffer more”.
Cllr Butt added: “For me, it’s personal. I was born in Brent, my family is in Brent, and everything I do is about delivering for everyone in Brent. Having to make tough choices like this is hard, it plays on my mind every day, every night.
“When I’m sitting at home that’s what I’m thinking about; What else can I do? Have I explored every option? Have I had every discussion? Have I pushed everyone hard enough?”
The council and its services are funded by three means; council tax, business rates, and fees and charges, which, alongside service cuts, will have to be increased in order to find the additional £8m required between 2024/25 and 2025/26.
The budget proposal includes plans to once again increase council tax by the maximum amount allowed without a referendum – 4.99 per cent – as well as a rise in business rates and below inflation increases to fees and charges, such as pest control, garden waste collection, hosting events, and parking.
LGUI’s survey revealed that one in 10 councils believe they are threatened with not being able to fulfil their statutory duties, such as housing, waste collection and social care. Across England, there have already been seven local authorities hit with Section 114 notices – which essentially declares them bankrupt – and a further 26 are described as ‘on the brink’.
Brent Council currently has £18m in reserves but officials have warned that these would be “rapidly depleted” if spending carried on at the current rate. Cllr Butt has introduced spending controls to ensure the council doesn’t end up facing down the possibility of a Section 114 notice.
He added: “They are about saying to every person in this organisation, ‘are you spending the money wisely? Why are you spending that money?’ and making sure it is being used correctly because, if I don’t do this now, Section 114 could be down the road. […] How much more can local government absorb?”
Last month the council warned that its finances were “on a knife edge” as it revealed a £13m budget overspend in the housing services department – particularly due to rising homelessness in the borough and the need to provide more temporary accommodation.
Cllr Butt explains that between 130 and 150 people a week are currently coming to the council looking for housing support. He said: “One of the pressures we know we are facing is in relation to housing. After the cost-of-living crisis it’s the housing crisis, they go hand in hand.”
Brent Council was awarded a £7.9m new homes bonus by the government for increasing the supply of homes more than any other borough last year. Cllr Butt believes this “demonstrates our commitment and drive to make sure we are building the homes that people need”.
However, with homeless applications in the borough up 22 per cent on last year, these new houses are needed urgently and immediately. The government’s homeless grant, which helps councils with temporary accommodation, only went up by three per cent in the year 2023/24 – way below the 10 per cent inflation the local authority is facing.
Delivering local services has been massively impacted by inflation, a growing demand – particularly in housing services, as well as children’s services and adult social care – and decreased government funding. The council’s Deputy Director of Finance, Ravinder Jassar, told the LDRS that these have “really hit [Brent] hard”.
He said: “Since 2010, [the government said] that core council services could be funded by local taxation, not national taxation. So as you saw a decrease in central government funding, you have seen a massive increase in local taxation. We are funded more now by council tax and business rates than we have ever been before. It’s made up some of the difference but not enough.”
He added: “It’s a precarious position, we are awaiting the Autumn statement (which will be brought to the House of Commons on November 22), that’s going to be key. I’m in a network of all London boroughs and it’s the most worried I have seen them in quite a few years. […] The only way local government is going to be sustainable is for the government to put more money into the system.”
Cllr Butt called the dependency on grants “no way to run local government” and is urging the government to “fund it properly” and give the council more power to make decisions for the community. He said: “The best placed organisation to look after its residents is the council, we know and deliver for them on a daily basis.
“Then you have people sitting in Whitehall who think they know Brent from a spreadsheet. We know where the issues are, that’s why we set up the community hubs, the café in Stonebridge Park, that’s why we work with Brent Health Matters partners.” He added: “Give us the authority and the resources, let us make those decisions so we can protect the residents that need our help and support.”