Richmond residents will see their council tax hiked by the maximum amount allowed without a referendum this April, with the average band D household paying more than £2,100 a year. Richmond Council plans to spend millions more on social care and homelessness services after approving the budget for the coming financial year on Tuesday (March 7).

The authority approved the 4.99per cent increase in council tax at the meeting for the 2023/24 financial year, which includes a 2.99pc hike for general use and 2pc for adult social care.

Lib Dem councillor Robin Brown, finance leader member, said the budget "represents the right balance to ensure that we can deliver for residents, run the council efficiently and maintain a sound financial position".

He said the budget includes a £5.5million increase in the amount spent on children's social care and £3.6m on adult social care, along with an extra £1.3m on homelessness services. Projects being progressed by the council include the revamp of Twickenham Riverside, building more affordable homes, creating more than 100 school places for kids with special educational needs and consulting on a new leisure strategy. The authority also created a £3m cost-of-living emergency fund from reserves to support residents.

Councillor Brown said the council had to close a £16m budget gap to balance the books, including a £5m savings programme in addition to £2.5m savings already planned. He said the authority is hiking council tax due to high inflation, pressures on social care services and uncertainty over government funding while making no cuts to frontline services.

He said: "This is still going to require a further £3.5m contribution from the financial reserves held by this council and that we've put in place during our first four years – and that's in addition to other planned uses of reserves totalling around £2.5m. Using reserves in this way does mean… that our spending is exceeding our income and that is manageable for a short, rainy day period but it is not sustainable indefinitely." 

The hike means the average band D household in Richmond will pay £2,141.21 a year in council tax when taking into account Mayor of London Sadiq Khan's share, which is set to increase by 9.7pc – an overall increase of 5.92pc on 2022/23. Residents who qualify for the council tax reduction scheme will receive up to an extra £100 off their bills and the authority's cost-of-living support programme will continue.

But the Conservatives and Greens called for changes to the budget. Conservative councillor Geoffrey Samuel said the authority should freeze council tax by using reserves, the predicted underspend on its revenue budget in 2022/23 – which a council report puts at £2.4m – and a rebate of £1.6m from West London Waste.

Green councillor Richard Bennett praised the budget but also raised concerns about the authority borrowing more cash and the time taken to finish projects. Green councillor Andreé Frieze put forward amendments to the budget including removing 30 minutes' free parking offered on the Richmond Card, increasing investment in bike hangars and subsidising bike hangar rental. She said ending the free parking would bring in £303,000 and pay for the other two proposals.

Councillor Brown said the Green amendments were "late, they were uncosted, they were unquantified" and there were many suggestions he did not agree with – including removing 30 minutes' free parking. The Green amendments were rejected in a vote.

Councillor Brown said Councillor Samuel's approach would result in "a dogmatic freeze in council tax and then leave officers to work out which services should be cut". He said the council is using reserves but has "to make sure that we don't open up an unbridgeable gap between income and spending".

He added the budget will help the authority deliver on the administration's manifesto, maintain excellent services and help those most challenged by the cost-of-living crisis. The budget, including the council tax hike, was approved at the meeting.