Grenfell Tower: Kensington set to increase council tax by maximum amount amid financial pressures

Rise would be 'not dissimilar to that faced by most residents in other London boroughs', report notes

Kensington believes it will have spent around £51 million in its response to the fire as of 31 March (Getty)

Council tax is likely to increase by the maximum amount in the Royal Borough of Kensington and Chelsea (RBKC) as it continues to face significant financial pressures in the aftermath of the Grenfell Tower fire.

Proposals to increase it by the maximum amount of 2.99 per cent for the majority of residents from April due to “rising costs and inflation", will be voted on.

There are also plans to top up charges with money ring-fenced for social care by the maximum three per cent, in order to meet “significant additional expenditure” for Grenfell-related adult social care.

The proposals, set out in a financial report, have already been approved by the leadership team and will go before the full council for a vote on 7 March.

If accepted, it will be the second increase in council tax since it was frozen in the 2009/10 financial year.

A report by director of finance Chris Buss, noted: “Much uncertainty exists around the cost of ongoing support for former residents and others affected by the Grenfell Tower fire.

“These combined with other liabilities which may arise with respect to this tragic event represent a major and persistent risk to the council’s finances.”

The report added that while most costs would be met through reserves, some would be ongoing and it “is not unreasonable that these costs should be met from general ongoing taxation”.

It added that the rise would be “not dissimilar to that faced by most residents in other London boroughs”.

The Local Government Association (LGA) said councils in England would raise an estimated £1.1bn through higher council taxes in 2017-18.

Nearly half of English councils with responsibility for providing social care for adults and children will increase council tax by the maximum 5.99 per cent allowed – 2.99 per cent for general council tax plus a further three per cent to pay for the care of older and disabled adults.

Councillor Elizabeth Campbell, leader of Kensington and Chelsea Council, said: “Like many other councils across the UK, our funding is decreasing and our costs are increasing. We will be asking for an extra 3 per cent to invest in support for those who are disabled, elderly, at risk, or in poverty.

“This extra social care funding will also contribute to the future Grenfell response – a unique health challenge for this borough and its residents.”

She added the team “did not take this decision lightly” and payments for a band D property would rise by just £47 a year – less than £1 a week.

RBKC estimates that Grenfell will cost around £88.5 million in revenue over the period to March 2019.

The local authority believes it will have spent around £51 million in its response to the fire as of 31 March – with £21.534 million from its reserves.

It forecasts Grenfell spending over the next financial year will cost £36.753 million, £34.485 million of which will be drawn from its reserves.

The forecast means RBKC is set to become the fifth poorest London borough in terms of its reserves compared against its net revenue spending. In 2017, it was the richest.

Its reserves are projected to more than halve by April 2019 to around £62 million, compared to £171,270 million just months before the fire.

Additional reporting by Press Association