The City of London Corporation is being urged to hold a “meaningful consultation” with residents ahead of potential tax rises and service cuts to mitigate the impact of Government funding reforms.
The Corporation, which governs the Square Mile, has yet to give details of what measures may be necessary to balance its books for the forthcoming financial year.
This is in contrast to other local authorities facing similar financial pressures, raising concerns about how much consultation with residents and businesses the Corporation is planning.
Sue Pearson, Chair of the Golden Lane Estate Residents’ Association (GLERA), said residents are being “squeezed from all directions” and that having a say in how taxes are raised would at least help them understand the issues the City is facing.
A Corporation spokesperson said the authority is developing “new ways” of communicating with residents ahead of the 2027/28 budget and will ask residents and businesses which services they value most.
The City of London Corporation is facing a significant funding shortfall as a result of the Government’s Fair Funding reforms, which are intended to redirect money towards councils with the greatest need.
Its unaudited statement of accounts for the City Fund for 2025/26, published this summer, revealed a projected deficit of more than £70 million by 2029/30, partly due to the funding changes.
Some measures have been agreed with the Government to ease the impact, including three years of transitional funding.
The Corporation is also among several councils to have restrictions on local tax increases removed for 2027/28 and 2028/29, meaning council tax could rise by more than usual.
Media reports have suggested the Corporation is considering an increase to the business rates multiplier charged to businesses in the Square Mile to help address the shortfall.
Calls for public consultation ahead of City of London budget
At a Policy and Resources Committee meeting last month, Deputy Jaspreet Hodgson asked when the Corporation would launch a public consultation on its budget proposals, particularly as other councils affected by Fair Funding had already begun or completed their own engagement exercises.
Deputy Chris Hayward, the Corporation’s Policy Chair and de facto political leader, said: “We hold an annual public City Question Time ahead of budget-setting each year to which residents and business ratepayers are invited, and I consider this to be a transparent and satisfactory public consultation.”
Asked whether this meant the question time event would be the only consultation held, a Corporation spokesperson told the Local Democracy Reporting Service (LDRS): “In addition to our City Question Time events, we are actively considering how to best engage with residents ahead of next year’s budget-setting.”
Several weeks after that meeting, concerns have continued over the lack of public engagement ahead of the budget, which the Corporation is due to agree in the new year.
Hammersmith and Fulham Council, another London authority facing significant funding reductions under the Fair Funding review, launched a wide-ranging consultation last month seeking feedback from residents and other stakeholders.
Westminster City Council, which is also affected by the changes, carried out its own engagement earlier this year.
Deputy Hodgson said: “Residents in the Square Mile will be deeply disappointed by the Corporation’s dismissive attitude to engaging with them in the face of unprecedented financial pressures inflicted by the Government.
“In other parts of London facing the same issue, local authorities have had the decency to carry out proper, structured consultations with residents before any major decisions are taken on either reducing services or significantly increasing council tax. Meanwhile, in the City of London, residents are treated as second class citizens.”
Responding specifically to Deputy Hayward’s comments at the previous Policy and Resources Committee meeting, Deputy Hodgson said: “The idea that holding a one-off ‘City Question Time’ event just before the budget is voted on by the Court of Common Council early next year – by which time it’s unlikely any changes could be made – is insulting and makes a mockery of the Corporation’s commitment to a ‘residential reset’.
“The Corporation must urgently launch a full, meaningful consultation with residents and afford us the same opportunity offered to residents in other parts of London.”
Ms Pearson said the lack of planned consultation came as little surprise, “despite the fact that residents are the reason the Corporation is a local authority”.
She continued: “Residents’ finances are being squeezed from all directions and having a say about how the taxes are raised and used at least gives us an understanding of the issues that the Corporation faces and vice versa. It would be nice to think that they might change their mind but time is running out.”
A spokesperson for the City of London Corporation said: “Alongside our regular engagement with residents, including a City Question Time focused on our finances each February, we are developing new ways to communicate with them about the 2027/28 budget.
“As part of this process, we will be asking residents and businesses which of our services they value most, so we can understand better what matters to them and where to prioritise our focus”.
