Hackney (Parliament Politics Magazine) – Hackney’s mayor says the borough is tackling financial pressures head-on amid mounting concerns over the perilous state of local government finances in England.
According to a new analysis released on Wednesday, central government plans to support local authorities have so far been “short-term and unsustainable,” even while demand for council services is still rising.
A week after Chancellor Rachel Reeves presented the Treasury’s expenditure plans for various government agencies over the ensuing years, the Public Accounts Select Committee released its conclusions.
This includes a £39 billion support package for affordable homebuilding and an average annual budget rise of 1.1% for the Ministry of Housing, Communities, and Local Government (MHCLG).
A ten-year “social rent settlement” was also promised in the review, which would raise council housing rents by 1% on top of the Consumer Price Index.
Caroline Woodley, the mayor of Hackney, responded to the spending review by calling it “so welcome.”
She claimed that the pledges will provide the Town Hall “more certainty” in overseeing its housing stock and support her goal of constructing 1,000 new social rent houses in the borough.
The Citizen asked the mayor if she believed the Chancellor’s choices demonstrated a more sustainable and long-term strategy to funding local councils in light of this week’s report.
Mayor Woodley said:
“Ministers have heard the call for investment I’ve raised on behalf of Hackney, and in partnership with colleagues across London Councils and the Local Government Association.”
When asked how the Town Hall planned to cope with rising service demand amid its looming restructure, she said the council was “rising to the financial challenge locally”.
“We are developing ambitious plans to change how we work, cutting costs whilst improving services for our residents,”
She said.
“With budgets stretched, protecting Hackney’s most vulnerable residents remains my priority.”
The mayor added that she was
“pleased that ministers had listened to local councils” in their decision to extend an accountancy loophole for authorities’ special educational needs and disabilities deficits.
This mechanism had allowed councils to write-off their overspends on higher needs, but was slated to expire in March 2025 – leaving many councils fearing a “cliff-edge moment”,
She said.
This confirmation helps us plan for the long term.”
On the same day that the administration declared it would extend the agreement for an additional two years, the mayor made his remarks to the Citizen.
While some experts and council leaders applauded the news, they also pointed out that many local authorities were still in danger of having to cut back on spending on necessary services.
According to the Select Committee’s report, which was released on Wednesday, June 18, several councils may “effectively go bankrupt” if the loophole closes in March of next year.
The investigation also found that there were indications that the standard of council services was deteriorating and that MHCLG was unsure if the money it provided to local governments was being used effectively.
How is Hackney’s borough managing the ‘perilous’ strain on local services?
The council has approved a balanced budget for 2025–2026 that takes advantage of a recent, unanticipated rise in government funding while also saving close to £25 million and using reserves to fill in budgetary shortages. The 4.99% increase in council tax was made to obtain more money for essential services.
Notwithstanding budgetary constraints, Hackney continues to provide vital frontline services, particularly for residents who are most in need, and makes investments in parks, community programs, and apprenticeships to promote social inclusion and welfare.
In order to preserve and enhance local services, the council regularly advocates with the federal government and Transport for London (TfL). This includes fighting against bus route cuts that impair citizens’ mobility and advocating for improved transport infrastructure.