Islington’s finance chief says budget will protect frontline services amid tax hikes and cutbacks

Islington’s cabinet member for finance, Cllr Diarmaid Ward.

Islington Council has assured residents that its latest budget will shield frontline services – as it plans to raise council tax and save £44 million by 2030.

On Wednesday (8 January), the Town Hall published new financial plans to help it get a handle on “budget-stretching” increases in demand for housing, children’s services, adult social care and others.

Council documents predicted that these particular provisions would drive up the Town Hall’s net costs to £350 million a year by 2029/30.

But the borough’s finance chief stressed that despite these “difficult choices”, equality was still “right at the heart” of the Town Hall’s strategy.

Cllr Diarmaid Ward (Labour) said that although the choice to raise council tax by 4.99 per cent was not the one the Town Hall wanted to make, it was the best way to “protect frontline services”.

Acknowledging that the hike comes as the cost-of-living crisis continues to burden residents, he insisted they were “really proud” to have protected the Council Tax Support Scheme for the borough’s poorest residents.

“Over 8,000 working age families get 100 per cent council tax support, and another 8,000 will get 95 per cent support.

“It is a banded scheme, so even if you think you don’t meet the threshold, go and talk to our income maximisation (IMAX) team. Even if you don’t get 100 per cent support, you might get something,” he said.

The budget includes a target of 1,000 new apprenticeships in the borough by next March, which the council plans to support by creating an Islington Apprenticeships Academy to grow the number of placements offered by its partners.

Unspent apprenticeship levy funding will also be shared with small businesses.

As local governments across the country battle financial strains, compounded by inflation, Islington is seeking to balance its books by clawing back more than £10 million over the next year alone.

The council is also waiting with bated breath for the government’s much-anticipated £69 billion multi-year settlement for local government in 2026/27, which Ward says will be a “game-changer”.

Chancellor Rachel Reeves previously announced an additional £1.3bn spending for councils in October’s budget.

Cllr Ward highlighted the damage inflicted by austerity measures imposed by the coalition government over a decade ago, which he says deprived the council of £300 million in funding.

“It’s not something we can solve overnight. It’s been a hard ten years, frankly, but we’ve got through it thanks to careful stewardship,” he said.

Islington’s corporate director of finance, David Hodgkinson, added that the local authority was “constantly paddling hard to keep ourselves in a good financial position”.

Last June, the Institute for Fiscal Studies (IFS) revealed that local authorities had seen a real-terms funding cut of at least 40 per cent between 2010 and 2020.

While the council tax rise will help fund the delivery of adult social care in the borough, the council also plans to slash overall spending on this service through outsourcing.

Nearly £1.9 million is expected to be saved by replacing the council’s current in-house ‘reablement’ service for hospital discharges with a cheaper external provider.

Alongside this are staff cutbacks of 2.5 per cent that are expected to recoup £10.8 million over two years.

Ward said this measure was “ambitious” but necessary if it helps the council maintain its public provision.

“The back office has to be as efficient as possible. We owe it to residents to pull everything out of the hat to protect frontline services.

“It’s not easy, but if it [does], given the situation it’s the right thing to do.”

Islington Council’s budget is currently out for public consultation, ending on 29 January. The full list of savings proposals and other financial papers are available to read on the council’s website.

The final plans will be considered at the Full Council meeting on 27 February.

Residents seeking advice on money and debt can visit the IMAX page on the council website.