Maximum hike allowed without referendum proposed by Haringey Council leadership, reports Simon Allin, Local Democracy Reporter

Senior Haringey councillors have agreed to raise council tax bills by almost 5% as part of the local authority’s new budget.

The 4.99% hike, due to take effect from April, consists of a 2.99% rise in core council tax and a 2% increase in a levy used to raise money to fund adult social care. It is higher than had previously been proposed by the council in early budget discussions late last year.

Until last year, councils had to hold a referendum if they wanted to hike bills by more than 2.99%. But in November, the government announced it would allow local authorities to increase bills by up to 4.99% without putting the proposals to a vote.

The final version of the council’s budget and medium-term financial plan was agreed by cabinet members during a meeting on Tuesday.

Sarah Williams, cabinet member for finance and local investment, acknowledged it was “a really tough time for all our residents with the cost of living crisis” but said failing to increase council tax by the full amount would lead to “harder choices” and “store up financial pressures on future budgets”.

The budget also includes plans to invest £16.4million in children’s and adult’s services, maintain the council tax support programme, continue funding free school meals for an additional 650 children, and put Rising Green Youth Hub in Wood Green on a “long-term footing”.

Like other local authorities, Haringey has been hit by soaring inflation and rising interest rates, which have pushed up the cost of borrowing money and delivering services. As councils have to set balanced budgets by law, this has put extra pressure on authorities to save cash and boost income.

Haringey’s budget and medium-term financial plan features £15.4m of savings and revenue raising during the next financial year – some of which have already sparked controversy.

The majority of the £6.6m environment savings are expected to come from fines raised by low-traffic neighbourhoods (LTNs) and ‘school street’ enforcement cameras. The savings plans were criticised by backbench Labour councillors last November during a leaked email exchange.

Another contentious scheme involves allowing 840 new homes to be let out at London Affordable Rent (LAR) levels, which according to council figures cost £32 per week more than the average ‘formula rent’ charged for most of the borough’s social-rent homes. It has led campaigners to accuse the Labour administration of breaking a promise to build council homes at council rents, which the administration denies.

Speaking during Tuesday’s meeting, Paul Burnham, from campaign group Haringey Defend Council Housing, called for the rent hikes to be withdrawn. From April, he claimed, the gap between LAR rent and average formula rent would be as high as £79 per week.

Paul said LAR was “not affordable for a typical lower-income family with both parents working, one full-time and one part-time”.

Dana Carlin, cabinet member for housing services, private renters and planning, replied that the council did not want to put up rents, council tax or service charges but was doing the best it could given the position it faces after “twelve years of austerity”.

Pippa Connor, the Liberal Democrat vice-chair of the overview and scrutiny committee, raised several concerns over elements of the budget. She pointed out that Tottenham Hotspur FC had so far contributed nothing towards matchday clean-up costs around the stadium – which totalled more than £100,000 in 2022/23 – despite a council plan to recover money from the club.

Cllr Connor also raised concerns over the risk of a budget shortfall for adult social care after the scrutiny committee learned that an expected inflation rate of 5% had been used to provide £4m of funding to meet extra costs – below the 7.4% inflation rate for 2023 forecast by the Office for Budget Responsibility.

The final budget will need to be approved by the full council before it takes effect.

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