The run up to the rescheduled mayoral election on 6 May looks likely to see continued wrangling over possible Council Tax hikes to help pay for free travel for under-18s and for 60 to 65-year-olds.
Final City Hall budget proposals, covering police and fire services in the capital as well as Transport for London, will be published on 17 February and submitted to the London Assembly on 25 February, the Assembly’s budget and performance committee heard today. A two-thirds majority is required for any amendments proposed by the Assembly to take effect.
The draft budget, out for consultation until 15 January, assumes savings of £325 million in 2021/22, with gross revenue spending at almost £14 billion.
Sadiq Khan has already confirmed an increase of at least £1.59 – 1.99 per cent or three pence a week – to his share of Londoners’ Council Tax. However, he told the committee uncertainties remain around forecasts for both Council Tax and Business Rates income in the coming year and how the £125 million cost of the fares concessions will be met.
The Mayor said City Hall would not be scrapping them, but with the terms of the recent second TfL bailout prohibiting government funding being used to pay for them – described by the mayor as a pre-election “political trap” – difficult choices remain.
Those could include a further Council Tax increase or even the flat rate charge on drivers entering the London area mooted before Christmas, Khan said. The bailout agreement states that an alternative to the Council Tax increase could be “to maintain the Congestion Charging changes implemented in June 2020” but Khan told the committee the Congestion Charge could legally only be applied to reduce congestion rather than used for raising income generally. “The exam question for me is how to pay,” he said.
The bailout deal also requires the Mayor and TfL to meet an 11 January deadline to “produce a single comprehensive management plan” for achieving “financial sustainability” by 2023.
Arguments continued over transport secretary Grant Shapps’ assertion that “national taxpayers” should not be “forced” to fund concessions not available in other parts of the country.
“It frustrates me when government ministers say things like that,” said Khan. “It’s dividing the country. It’s a fact that we contribute far more to government coffers than we take back. We subsidise travel across the country.”
Some in central government were also guilty of “selective amnesia,” he said, as Liberal Democrat AM Caroline Pidgeon reminded the meeting that that TfL’s over-60s card – as distinct from the Older Person’s Freedom Pass – had been introduced by Khan’s predecessor, Boris Johnson.
“We need a long-term funding mechanism for TfL that provides certainty,” added Khan’s chief of staff David Bellamy, while the Mayor contrasted TfL’s position with the longer-term arrangements in place for National Rail and the Highways Agency, and the “blank cheque” given to train operating companies. “You can’t escape the conclusion that London is being treated differently,” he said.
Khan also clashed with Conservative AM Tony Devenish, who accused the Mayor of wasting “£1.5 million on a pathetic firework party” – the New Year’s Eve replacement for the traditional fireworks, including light effects and a display comprising 300 drones.
The display had been watched by more people than ever before and helped promote the city internationally, Khan responded. In September, Devenish criticised Khan’s decision to cancel the traditional New Year’s Eve firework display, calling it “a hammer blow to central London“. The Mayor said at the time that plans were being made for an alternative event.
A webcast of the budget and performance committee meeting can be watched here.
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