Monday 12 March
City of London sets its Council Tax and Rates but says funding
shortfall is “unsustainable”
The City of London Corporation, the unique authority for the
UK’s Square Mile business district, last week set its Council Tax
and Rates for 2007/08 but warned that plugging its £4-5m annual
funding gap from reserves was “unsustainable” and risked
undermining its work to promote London as the foremost
international finance and business centre – worth billions of
pounds each year to the UK.
Finance Committee Chairman, Philip Willoughby, told the City of
London Corporation on Thursday that its Government grant of £99.2m
and Council Tax income of £5.1m would again fall far short of its
public services spending of £159.9m.
Whilst most of the gap will be covered by internal income from
rents of £29.3m, interest of £17.1m and a special business rate
raising £5.1m, a revenue deficit of £4.1m would still remain to be
met from reserves.
He said: “The City does a unique job for London and the UK and
we have always used our private funds to help pay. But
however hard we sweat our own assets we are now falling short by
between £4m and £5m a year – and we can’t go on eating into our
reserves to cover it.
“We do more but seem to get less to do it with under the
Government’s grant formula – largely because we are unique in
having a small resident base.”
At one time we had a special City Offset grant of some £6m per
annum to compensate but this has been terminated and now we have to
make savings and eat into reserves to manage.”
The Common Council agreed a 2.5% increase in non-domestic rates
to 44.8p in the pound, and a rise in its own Council Tax of 4.8%,
putting Band D at £820 or £900.28p including the GLA precept
(representing a 4.6% increase overall on last year).
The world class Barbican International Arts Centre, its Port
Health Authority role, the London Metropolitan Archives and much of
the City’s economic development work are all paid for from its
public services budgets, as well as Police, Housing and Social
Services.
Ends
Notes for editors
- The last year that the City Fund received the £6.5m offset was
2003/04. The use of reserves for the three years since losing the
offset are: 2004/05 - £6.0m; 2005/06 - £8.0m; 2006/07 -
c£10.1m.
- The City of London Corporation is committed to maintaining and
enhancing the status of the wealth and tax-generating business of
the City as the world's leading international financial and
business centre through its policies and services. Examples are the
extensive overseas business missions on behalf of UK-based
financial services and the wide-ranging economic development,
research and regeneration effort the City of London Corporation
undertakes across London.It also runs the City Office in Brussels
on behalf of the City and City Representations in Beijing, Shenzhen
and Shanghai – and a City Office in Mumbai. Although the City of
London Corporation provides local government services for the City,
the financial and commercial heart of Britain, its responsibilities
also extend far beyond the City boundaries and include management
of the Barbican Centre, Central Criminal Court at the Old Bailey,
Epping Forest, Hampstead Heath, three wholesale food markets, as
well as acting as the London Port Health Authority – and running
the Animal Reception Centre at Heathrow.
For more information, Contact Greg Williams, 020 7332 1455,
07889 167 205
48 - 120307gpw