Hackney Council's budget and the government's cuts

Last night Hackney Council set its budget for the coming year.

Government grants to Hackney were cut by £38.6m last year – the biggest cut in the whole of London and one of the highest in the UK. This year Hackney sees a further reduction of £17.3m – a total of £55.9m across the two years, one of the highest absolute cuts faced by any Council, and the highest of any Council on a per head basis.

The reductions imposed on Local Government and Hackney in particular, have been presented under the guise of "deficit reduction" but ultimately at the core lies a desire to change, and an attempt to dismantle public sector provision in this country.


The cuts in funding fall hardest on local authority areas in the most deprived areas. Numbers provided by the Communities and Local Government Department show that between 2010/11 and 2012/13 the reduction in spending power per head for Hackney will be £256 compared to just £17 in Wokingham. This is further evidenced in a report by the Joseph Rowntree Foundation which confirms that it is the most disadvantaged communities who are shouldering the burden of the cuts both proportionately and in absolute terms.

In the face of this unprecedented reduction to our Government grant, the Council has been faced with having to make difficult decisions about how we can continue to provide high quality services to the people of Hackney.

It is not possible for Hackney to escape the impact of the Government’s spending review, however Hackney’s Labour Councillors and Mayor are determined that, as with last year’s budget, in the forthcoming year the Council will not make cuts to the services received by residents.

For example, there will be no raising of eligibility criteria for homecare for the elderly, no library closures, no closure of children’s centres, and no reduction in the cleanliness of our streets.

Due to prudent financial management over the last ten years and continuing to find new ways to approach our back office support and front line services, we have been able to safeguard front line delivery, coping both with cuts to our grant and additional cost pressures such as the £1m hike in the cost of Hackney’s share of the Freedom Pass which take our budget gap to £25m.

However, we are reaching the limits of this approach. By the end of this coming financial year, any savings that can still be wrung out of the Council’s administrative and back office functions will be dwarfed by the size of further reductions to our Government grant. We will keep looking for more and more efficient ways to do things, but the fact is, in future years, we will not be able to absorb the impact of Government cuts without services being affected. In 2013/14 and 2014/15 we will need to find up to another £40million in savings, and to make some very difficult decisions. Now this years budget has been set, we will be embarking on a wide-ranging consultation with residents to find out your priorities so as to help us make those decisions.


These are challenging times - the cuts we face will limit our ability to continue to invest in the borough in the way we have over recent years. At the same time we as Hackney’s Labour Councillors are determined to make sure that we use the powers that we have to protect frontline services and ensure that the needs of the most vulnerable people in our borough are prioritised.

If you are interested in finding out more, the full budget document – including a statement from Mayor Jules Pipe and the full budget proposals - they can be found here.

In addition, a full Budget FAQ has been posted on Hackney Labour’s website outlining why we are not raising Council Tax and why setting a reduced, legal Budget cannot be avoided.