Sadiq Khan’s latest council tax rise revealed as Mayor’s share of bills for Londoners rises to nearly £500

Sir Sadiq Khan has announced his lowest council tax increase for five years – but an average London household will still pay the London mayor almost £500 a year.

Sir Sadiq plans to increase his average “precept” – the amount he adds to bills sent out by each of the capital’s 33 boroughs – by four per cent from April.

This will add £18.98 to a benchmark band D bill, taking the mayor’s share from £471.40 to £490.38.

It is the smallest percentage increase since 2020/21 and almost half as much in real terms as his last two increases, which were of about £38 a year in 2023/24 and again in 2024/25.

The bulk of the extra cash – £14 – will go directly to the Metropolitan police to help to keep 1,300 neighbourhood officers funded by City Hall on patrol and tackle violent crime and robbery.

The remainder of £4.98 will go to the London fire brigade.

The mayor’s new budget includes £147.5m funding for his free school meals that he has been providing to all primary school children in London state schools since September 2023.

The free lunches were initially meant to be a one-year initiative to ease the cost-of-living crisis for London parents.

But Sir Sadiq made the free meals a centrepiece of his 2024 mayoral election manifesto and promised to retain them for the entire four-term if re-elected. They will continue to be funded from business rates rather than council tax.

According to City Hall, the mayor’s new budget will deliver a £151m boost to policing, with the £14 from the higher precept generating £54m for the Met.

No additional funds will be provided to the “core” Greater London Authority – namely, the officials and political aides directly employed at City Hall, including the mayor’s nine deputy mayors, who each earn about £147,000 a year.

The GLA’s “core” budget also covers the £2.8m-a-year cost of running the London Assembly, including the £64,000-a-year minimum salaries paid to the 25 assembly members.

Full details of how Sir Sadiq will allocate his 2025/26 budget were published on the City Hall website.

These will be debated next week by the London Assembly before being formally voted upon next month.

The mayor’s budget can only be amended by a two-thirds majority of assembly members – which is unlikely to happen as Labour holds 10 of the 25 seats, meaning it can block any changes proposed by Tory, Lib-Dem, Green or Reform members.

At present, the benchmark band D amount paid to the Greater London Authority is £471.40.

When this is added to the amount levied by councils, it means that about a third of London boroughs currently issue average annual bills in excess of £2,000.

Most boroughs are expected to increase their share of council tax by five per cent – a figure already adopted by Tower Hamlets and Islington councils. Newham council is seeking an extraordinary 10 per cent hike to save it from going bust.

Other boroughs will publish draft figures towards the end of January.

Sir Sadiq – who was knighted in the New Year’s honours list – set his first City Hall budget in February 2017, when he inherited a band D precept of £276. This had been cut by £19 the previous year by his Tory predecessor, Boris Johnson.

Since then, the mayoral precept has increased each year, with the hike varying in severity between 1.5 per cent in 2017 and 9.7 per cent in 2023, when £38.55 was added to average bills. This was the biggest rise in the mayoral precept for 20 years.

The new amount – which will be due from April – will almost certainly mean that Sir Sadiq’s demands will have risen by more than £200 since he first came to power in May 2016.

The council tax precept generates about £1.5bn a year for the GLA. The bulk of the mayor’s £21bn budget – which includes subsidies for affordable housing and funding for tertiary education – comes from the Government or via business rates.

In the current 2024/25 financial year, about two-thirds of the council tax precept, some £963m, goes to the Mayor’s Office for Policing and Crime to help fund the Metropolitan police.

In addition, £244m went to Transport for London, £211m to the London Fire Brigade and the remaining £71m was spent running City Hall, including £2.8m on the London Assembly, the cross-party body that scrutinises the mayor.

In the wake of the knife killing of 14-year-old Kelyan Bokassa on a 472 bus in Woolwich, and ongoing concern about violent crime in London, Sir Sadiq has been urged by his critics, such as former Tory mayoral candidate Susan Hall, to maximise the amount he spends on frontline policing.

Met police commissioner Sir Mark Rowley fears losing 2,300 officers due to a financial crisis. But Sir Sadiq said this week that he hoped any cutbacks would not be as severe as first feared.

He told The Standard: “I’m still lobbying the Government for more money for next year, but the Met Police Service knows, as do Londoners, since I’ve been mayor, we’ve more than doubled funding to the police. I’m going to carry on supporting the police.”

He added: “The good news is there’s been huge progress made since then and over the course of the next few weeks, we’ll be working closely with the Met Police Service, with my team at City Hall, with the Home Office, to make sure we can support the police as much as we can financially, but also work with the police to lobby the Government, in advance of the spending review this year.”

Happy meals: Sir Sadiq has pledged to retain free school lunches in London primary schools (PA)

Sir Sadiq spends £140m a year providing free school meals to all State primary school children in London – money that he takes from his business rates income.

Since 2021, a levy to help fund TfL has been added to the mayor’s council tax precept. This was initially £15 a year for band D taxpayers but rose to £20 a year in 2022 and remained at that level in 2023 and 2024.

Prior to the pandemic, TfL received only £6m a year from council tax and relied on fares, Government grants, business rates income and self-generated profit from commercial activities.

TfL first received council tax cash to maintain free under 18-bus and tram travel and the 60+ Oyster card used by older Londoners to travel for free.

It later became a condition of the Government bailouts that kept TfL afloat during the pandemic that City Hall should contribute its own funds to help pay for the capital’s transport network.