London’s richest borough is consulting on making a wave of cuts to services as homelessness and social care bills put unsustainable pressure on its finances.
Kensington and Chelsea council said it will need to make some “difficult decisions” as it seeks to plug a “significant” £40million budget hole over the next four years.
The bulk of the financial pressure is down to increased demand for temporary accommodation and children’s and adult’s social care, the town hall said.
While the area includes some of the most exclusive and expensive addresses in the UK, it is also home to pockets of deprivation and saw the devastating Grenfell Tower fire in 2017.
The borough supports more than 2,000 families living in temporary accommodation. Average house prices have reached £1.1million and monthly rent costs are £3,435, according to ONS data.
In the recent Autumn Budget, Chancellor Rachel Reeves announced £233million to help councils tackle homelessness. However, London boroughs alone are now spending £1billion a year on temporary accommodation.
Kensington and Chelsea council leader Elizabeth Campbell said: “The Government’s announcements on finance for temporary accommodation are welcome, but they do not touch the sides of the blackhole local government is facing in its finances.
“Without institutional investment now and a long-term funding settlement, the sector will not bear the weight for much longer.
“It is time for local government funding to be considered beyond a 12-month cycle. Without this, we will all struggle to plan and innovate; worse still, some councils may crumble.
“We need institutional investment so that councils have the capital to own their own temporary accommodation, where we can control and manage properties to provide a better standard of living.”
Measures being consulted on before the local authority’s budget is finalised early next year include:
Town halls across the capital are facing significant budget deficits due to the spiralling costs of social care and temporary housing.
The east London town hall is planning to stop financing Christmas and Eid lights to save £200,000. It has also suggested removing free tea and coffee for staff in its offices and banning internal catering, such as biscuits, for meetings in a desperate bid to save cash.
Havering was been granted a last-minute £54million loan earlier this year to prevent it going bust over soaring social care fees, while Lambeth has issued an urgent funding crisis warning over the cost of housing homeless families.
Councillor Johnny Thalassites, Kensington and Chelsea lead member for finance, said: “These are extremely challenging times for local government finance. We are not in the dire straits that some of our peers are in, but we are preparing to make some difficult decisions because we are still looking at a significant budget gap of up to £40million over the next four years.
“Despite these pressures, we are determined to make positive changes to the borough.
“That is why we are building new social homes, delivering energy efficiency improvements to schools and community centres, and continuing to keep taxes low and minimise costs for residents.
“We need the help of people who live and work in the borough to set a budget that reflects the needs of our communities.
“We need to spend wisely, make savings and continue to support our most vulnerable to make the borough a thriving place to live, work and enjoy.”
