Havering has one of the lowest average house prices but householders are paying one of the highest council tax rates in the capital, according to a study.
The annual charge for a Band D property in Havering – where the average house price in 2017 was £330,000 – is £1,598, which includes the slice taken by London mayor Sadiq Khan to pay for transport, fire and police services. The fourth highest rate in London.
This compares to Westminster where the average house price is £990,000. It has the lowest council tax charge of £688 per year in Band D.
Prices in Westminster are triple what they are in Havering but people are paying more than double the amount of council tax, the report shows.
It adds 64 per cent of Havering Council’s core spending power will be reliant on the tax this year. Householders in a Band D property paid £389 when council tax was first introduced in 1993. They now pay £1,318, excluding the mayor’s share. This is a rise of 239pc, putting the borough in the top five behind Kingston upon Thames’s 292pc rise over the same period.
Havering has 34pc of bill payers living in Band D properties.
The findings come from a report drawn up by leftwing thinktank the Institute for Public Policy Research which has led calls for the tax, worked out using 1991 property values, to be made fairer.
Dagenham and Rainham MP Jon Cruddas said: “Local authorities are responsible for setting council tax rates, and it is no coincidence costs are soaring in Tory-led Havering – they have consistently ramped up council tax year on year and it is hitting families across the borough.
“On the flip side Labour-led Barking and Dagenham froze council tax for seven years to help the most financially vulnerable. It is only now having to increase council tax because of harrowing cuts to council funding, delivered by an austerity driven Tory government,” he added.
But Havering leader Cllr Roger Ramsey hit back accusing Mr Cruddas of “punching below the belt”.
He argued it was “unfair” to compare Havering to Barking and Dagenham which gets more government funding meaning it can set a lower council tax rate.
“[Mr Cruddas] needs to brush up on the true position so he can do the best for his residents in Rainham,” Cllr Ramsey said.
He added it would not be feasible to predict hether the tax would rise in the future but that the council strives every year to make the lowest change it can while meeting rising demand for services.
Cllr Ramsey disagreed with the IPPR saying the “real unfairness” over council tax was not that it hit the poorest hardest, but its impact on the average family.
Hornchurch and Upminster MP Julia Lopez said: “The disparity of grant councils receive from central government, particularly when contrasting inner and outer London boroughs, means places like Havering have far less room to manoeuvre in setting council tax.
“I pledged to raise this pressing issue when I got elected in June, and I have seen that promise through by lobbying for change in meetings with ministers, and through speeches and questions in parliament.
“Havering has had the fastest growing number of children in any borough for the past three years, and we also have a substantial elderly population with high social care needs. This places a lot of pressure on local budgets, and consequently local taxpayers.
“The government understands the current situation needs reform, and is undertaking the fairer funding review to look at introducing a system that better reflects the pressure on areas like Havering.
“I have been working very closely with the council’s leadership to make sure that Havering’s voice is heard at the highest quarters in this process,” she added.
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