Hammersmith and Fulham (Parliament Politics Magazine) – Hammersmith & Fulham faces criticism for depleting its ‘once-in-a-lifetime’ cash reserves to avoid bankruptcy, raising concerns over financial sustainability.
At a full council meeting ON 27 February, 2025, the authority adopted its budget for 2025–2026 and commended itself for its “prudent” bookkeeping, which includes raising council tax by 88p per week.
But Victoria Brocklebank-Fowler, the leader of the opposition, said it could only do so because it was depleting its reserves. She also accused the Labour administration of creating a budget that was “full of guff with very little transparency.”
Council Leader Stephen Cowan told council members that the budget prioritized housing, health, education, and crime prevention.
The Labour councillor said:
“This is a prudent budget that tightly manages our finances and looks to be ready for whatever happens, just as we were in the pandemic.
But it is also a budget which takes the innate optimism at the heart of our Labour values that we can share a better, brighter future for our citizens.”
However, the Conservative opposition leader attacked the use of financial reserves by the council’s Labour administration and criticized the national Labour government’s most recent budget, which she claimed was impeding economic progress in the UK.
She said:
“The budget is balanced, however precariously, and we have avoided the fate of section 114. Nevertheless, the MTFS (medium term financial strategy) is majorly concerning.
Your ability to make annual savings is small and your reserves, both corporate and service, can only be spent once. You are borrowing at expensive rates and using once-in-a-lifetime reserves at pace.”
The budget, which includes a 2.99 percent increase in council taxes and an additional 2 percent increase in the social care precept, was approved by the council.
According to the council, this means that ratepayers will see an overall increase of almost 88p per week.
The council tax rate in Hammersmith and Fulham, which is the third lowest in the nation, has been lowered or frozen five times in the last ten years.
At a time when other London councils are reducing their programs to fill budget gaps, it also boasts a comprehensive council tax help program, with over 40% of families receiving some kind of discount.
Only three councils in London provide a 100% discount to the most vulnerable.
According to the budget, “efficiencies” in children’s and education services will total £2.4 million and £1.1 million, respectively.
Cllr Rowan Ree, cabinet member for finance and reform, stated at a previous meeting that the council was facing challenges like an aging local population and a “sluggish” national economy, in addition to revenue funding from the government, which had decreased from £164 million in 2010/11 to £132 million for 2025/26.
For 2025–2026, Hammersmith and Fulham will have £5.1 million in efficiency and £12.3 million in increased investment.
The council’s Law Enforcement Team and Gangs Unit will receive £3.4 million for community safety and social inclusion, £2.8 million for adult social care, and £1.2 million for homelessness, among other important areas of investment.
What are the budget strategies by Hammersmith and Fulham involving reserves to support new investments?
In order to finance additional investments across a range of sectors, including community safety, social care, and children’s services, the council’s budget strategy calls for the use of reserves.
This strategy is thought to be required to continue providing services in spite of declining government funding and rising expenses.
With a track record of sound financial management, Hammersmith and Fulham has maintained low council tax rates and provided a wide range of council tax assistance programs.
However, questions of long-term financial viability have been highlighted by the existing reliance on reserves.
The budget is facing criticism from the opposition, which claims it is unsubstantial and overly dependent on spending reserves. They contend that this strategy is unworkable and may cause future financial issues.
The council contends that their budget is required to preserve key services and is balanced.