Struggling Londoners slam 'outrageous' proposal for 70% council tax rise

Proposals to increase council tax bills by up to 70% have been condemned as "outrageous" by residents living in a west London borough.

The town hall faces a £108 million reduction to its budget by 2031 following the Labour Government’s Fairer Funding Review, which aims to funnel support towards struggling areas of the country.

The authority is one of five in London that have been granted permission by ministers to raise council tax above the national 5% cap for two years without holding a referendum.

But, despite the borough being London’s most expensive to live in, with the average cost of buying a home standing at £1.37m, people living in less affluent neighbourhoods have warned that not everyone can absorb the rate hike.

Antonio Carreira, 74, who runs the Spanish eatery La Plaza Deli in Ladbroke Grove with his wife, accused the council of trying to “milk” small businesses for cash.

Mr Carreira said that perceptions that Kensington and Chelsea residents could afford to pay the extra amount were not an accurate reflection of life for everyone.

“What about the working class? What about when you get up at 7am in the morning and go home at 10pm at night, working all day?” he said.

Residents and business owners in Ladbroke Grove have hit out at the potential rate hike

LDRS

He said that after living in the area for 20 years, he had seen many businesses close their doors due to the increased cost of living.

“If the council invested more and showed consideration for us, things would improve. But what do they do at the moment? Just milk the money from us,” he said.

Resident Hortatio Zobar, 36, said that he would personally be affected by a 70% increase in council tax.

“I have neighbours who are very wealthy, that’s for sure, but me, I’m not so fortunate like them,” he said.

Robert Atwater, 63, who regularly stays in the borough, called the planned council tax increase “absurd”.

He looked to counter perceptions about it being a wealthy borough. Well-heeled areas such as Holland Park, Notting Hill and parts of Chelsea and Knightsbridge fall within the borough’s boundaries, along with more working class neighbourhoods such as North Kensington, where Grenfell Tower was located, and Latimer Road.

Mr Atwater said: “There’s a lot of people with more money, but it’s not a rich borough. There’s a lot of people on the poverty line.”

But other business owners said they felt the increase was “reasonable” as long as wages continued to rise.

That was the view of Peerapong Sansaneeyavong, founder of Okasan Sushi restaurant in Portobello Road. The 47-year-old suggested the council put in measures to support those who could not afford the new rates.

Ladbroke Grove business owner Peerapong Sansaneeyavong

LDRS

“I think they might need to do something specific for people who need help, to register, get in touch, and offer something to reduce the cost for a period of time to help with the transition,” he said.

Councillor Monica Press, leader of the Kensington and Chelsea Labour group, said residents in Kensington and Chelsea were “already feeling the pressure on household budgets”.

“This tax rise will make things harder for many families, especially after the council’s cuts to council tax support,” she said.

“The council has lost millions to failed projects and avoidable mistakes, including the cyber attack.

“It has also opposed the new Overnight Stay Levy, which could bring millions into the borough. The Labour group is ready to work with the council to protect services and find other sources of revenue before asking residents to pay more.”

The tax rise proposals will be discussed at a Kensington and Chelsea leadership team meeting on Wednesday ahead of a public consultation due to launch the next day.

No final decisions will be made until the budget is set at full council in March.

Kensington and Chelsea Council is facing a multi-million-pound budget shortfall

Hannah Neary/LDRS

Council chiefs are set to consult residents on three options for tax increases: maintaining the previously assumed annual rise of 5%, or introducing a much steeper increase of either 65% or 70% in 2027/28, followed by annual increases of 5% in subsequent years.

Councillor Emma Will, deputy leader and finance chief at Kensington and Chelsea Council, said: “I know the prospect of a council tax increase of up to 70% will be deeply worrying for residents.

“This is not a proposal I ever wanted to bring forward, but the Government’s unfair funding review has left us facing an almost impossible financial challenge.

“We have spent years keeping council tax low and managing public money carefully. Now, instead of being rewarded for that record, we are effectively being punished. Even after finding more than £50m in savings, with over £65m more to come, we must act now or face even tougher choices in the future.

“I will not pretend these are easy decisions. We will listen carefully to residents before deciding what happens next, and my priority remains protecting the services that matter most, making every penny count and continuing to fight for a fairer deal from Government. Our residents deserve nothing less.”