Hammersmith and Fulham council rejects claims it has dipped into reserves to balance latest budget

By Adrian Zorzut, Local Democracy Reporter

Hammersmith and Fulham Council has rubbished claims it is spending from reserves to balance the budget following an attack from the Tory opposition.

The council said it had in fact added to its general balance reserves in the last two years by running a budget surplus.

It also said it had reduced its budget by £138m since 2014 due to ‘ruthless financial efficiency’ and claims to have a healthy level of reserves.

The authority approved its budget for 2025/26 at a full council meeting last Wednesday night, claiming it as a ‘prudent’ balancing of the books, which includes an 88p-a-week rise in council tax.

However the opposition leader Victoria Brocklebank-Fowler claimed it was only able to do so because it’s using up its reserves, and accused the Labour administration of producing a budget ‘full of guff with very little transparency’.

In his speech to councillors, Hammersmith and Fulham council leader Stephen Cowan said the budget focused on crime, improving health, education services and housing.

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 and it seeks to drive that future through, relentlessly, no matter what circumstances are thrown at us.”

But the Conservative opposition leader criticised the national Labour government’s latest budget, which she accused of stunting growth in the UK economy, and slammed the use of financial reserves by council’s Labour administration.

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.”

A report by the council said its reserves were at an adequate level to deal with ‘anticipated risks and liabilities’. The report read: “All reserves are regularly reviewed to ensure they are appropriate balances and in line with strategic priorities and may be reallocated to align with any change in strategy or to meet budgetary pressures should the budgeted contingency and mitigation plans not be sufficient.”

Councillors passed the budget which included a council tax increase of 2.99 per cent and a social care precept rise of a further two per cent. The council said this equates to a total rise of around 88p a week for taxpayers.

Hammersmith and Fulham has the third-lowest council tax rate in the country, and has cut or frozen it five times in the last 10 years. It also has an extensive council tax support scheme, with almost four in ten households receiving some form of discount at a time when other London councils are cutting their schemes to plug budget black holes.

It is one of only three London councils to offer a 100 per cent discount for those most in-need.

In total, Hammersmith and Fulham will have £12.3m of additional investment and £5.1m of efficiencies for 2025/26. Key areas of investment include £3.4m for community safety and social inclusion through funding for the council’s Law Enforcement Team and Gangs Unit, £2.8m for Adult Social Care and £1.2m for homelessness.

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