Budget Consultation 2025/2026
We are inviting residents and business rate payers, also known as national non-domestic rate payers, (or their representatives) in Islington to comment on the council’s proposed revenue and capital budget for 2025/26.
The draft proposals are set out in the papers for the council’s Executive meeting on 16 January 2025 and the final proposals will be considered at the Full Council meeting on 27 February 2025.
Draft Budget Proposals 2025/26 and Medium Term Financial Strategy
How the council manages and spends its finances in the annual budget is fundamental to how we work together with businesses, partners and residents to create a more equal future for Islington.
We have to set a balanced budget as a council and department budgets are set with a strong focus on delivery of vital front-line services, relied on every day by many in the borough.
Islington has faced a huge level of Government underfunding over the past 14 years, prior to the 2025/26 provisional local government finance settlement. Recent analysis shows that Islington’s reduction in real terms Core Spending Power since 2010 and up to 2024/25 has been around £105 million, or 25%. Coupled with a growing level of demand for and cost of services annually, the council has had to deliver an unprecedented level of savings over the past 14 years to deliver balanced budgets.
Setting our budget for the 2025/26 financial year has been particularly difficult due to the impact of inflation, more people finding themselves homeless in the borough, as well as the continued increase in demand for social care services and wider support for residents. The significant increase in the costs of providing these council services has not been matched by an equivalent increase in income (including government grant), meaning that the council needs to make more budget savings and increase council tax to deliver a balanced budget in 2025/26 and subsequent financial years.
The process of identifying and delivering further savings every year whilst managing the impact that has on council services is very challenging and looks set to become even more difficult over the next few years.
Our preferred option is to increase council tax in line with the maximum core and adult social care precept amounts permitted by Central Government. These are 2.99% for council tax and 2% ringfenced for adult social care, creating a total of 4.99%.
For the average (Band D) property, the proposed 4.99% increase in the basic 2025/26 Islington council tax (excluding the GLA precept) equates to an increase of around £1.39 per week for full council taxpayers.
The impact of this will be mitigated by the Council Tax Support Scheme, which is on a banded basis, meaning the lowest-earning households pay no council tax at all.
Regarding business rates payments, these are controlled by central Government and Islington Council has no control over the increase in the business rates multiplier.
The small business rates multiplier (‘rate in the £’) will be frozen at 49.9p for a fifth consecutive year. In simple terms, freezing the multiplier means that business rates will not be subject to inflation. The standard business rates multiplier will be uprated in line with inflation to 55.5p (from 54.6p). This will show on business rate bills.
There will also be an impact seen on business rate bills relating to the Retail, Hospitality and Leisure Relief which has been extended by central Government for a further year, albeit at a reduced discount rate of 40% rather than the current 75%.
Thank you in advance for taking the time to tell us how you feel about the council’s budget. There are just five questions and it should not take more than five minutes to complete.
