2025/26

Your Council Tax helps us to run hundreds of vital services that make Merton a fantastic place to live, learn and work. Like every council across the country, we are facing some big financial challenges. However, thanks to good financial management here in Merton, we’re able to invest in to build a better borough for everyone.

Here in Merton we've just passed our budget for the next financial year and I wanted to take a moment to update you on what that means for you. Merton is special, so much so that the Times newspaper just ranked us as one of the best places to live in the UK. Whether that's our sporting heritage, our parks and our green spaces, being one of the safest boroughs in London or our fantastic schools, there's so much going on here in Merton.

But whilst there's lots to celebrate, there's still a lot of work that needs to be done. And that work doesn't come without challenges. Like councils across the country, we're still feeling the strain from 14 years of reductions in government funding between 2010 and 2024. Whilst at the same time, seeing a huge increase in demand on our services, like adult social care, temporary accommodation, or special educational needs services.

As a result, we have had to take the difficult decision to increase council tax this year. But, I'm pleased to say that we've been able to make sure Merton's council tax stays lower than in neighbouring Kingston, Richmond, Sutton or Croydon. And, we've been able to maintain our council tax support scheme, helping 10, 000 of the lowest income households in our borough.

Despite these challenges. We're optimistic for the future, and we're proud to be delivering for you and your family. That's why, over the next year, Merton will bring back weekly street cleaning so that our neighbourhoods stay clean and tidy. We will get on with building the first round of council homes in a generation.

We'll invest in maintaining our roads and fixing potholes. We'll help local businesses to thrive by improving our high streets and our shopping parades. We'll complete the improvements to our 24 hour CCTV network to keep Merton safe, and we'll invest in our parks, our green spaces, and our sports pitches, so that people can live a happy, healthy life.

We can do all this, and much more, because of our careful financial management. So in the Council's budget for next year, we're safeguarding the borough's finances, we're protecting the services you rely on, we're delivering value for money for taxpayers, And we're investing in what matters to you and your family.

 


 

Where we get our funding from

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Council tax 57.8%, Government grants 20.6%, Business rates 21.6%

The funding we receive from government was reduced by more than £17 million overall between 2010 and 2024, despite rising demand for our statutory and frontline services such as homelessness services, caring for older and disabled residents, and helping children with special educational needs and disabilities.

Following these significant government cuts, in 2025/26 our funding comes from:

  • Council tax 57.8% - Like almost every council in the country, we are having to increase Council Tax by 4.99%. This increase is made up of two parts:

    • a 2% increase called the Adult Social Care Precept – all of which will go to services for older and vulnerable residents such as dementia services, support for adults with disabilities, and mental health services.
    • a 2.99% increase that will go towards our general funds that pay for homelessness services, special educational needs support, waste collection, parks and so much more.

    To protect the least well-off households from this increase, we have one of the most generous Council Tax Support schemes in the country. This means that thousands of families will be lifted out of council tax altogether, while many more will see their bills reduced.

  • Business rates 21.6% - Business Rates are charged on most non-domestic properties such as shops, offices or warehouses. Like council tax, the amount a business pays is based on the value of the property. The amount charged is set nationally by the Valuation Office (a government agency) and central government, so we unfortunately have no say on the levels businesses pay. However, we can offer support to businesses that might struggle to pay through our Hardship Relief fund, Small Business Relief scheme, or our Employers London Living Wage Grant scheme which encourages a fair day’s pay for a fair day’s work.
  • Government grants 20.6% - While the money that we receive from central government has started to increase again in recent years, the overall picture since 2010 is a large reduction in the amount we have been given to deliver key services. This historic underfunding means the council is £16.7 million worse off than we would have been if our funding had gone up in line with inflation over the last 10 years.

 

How we use our funding

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Adult social care, integrated care, and public health 36.2%, Finance and digital 7.6%, Housing and sustainable development and Homelessness Services 4.1%, Environment, civic pride and climate 15.6%, Children, lifelong learning and families 33.3%, Innovation and change 3.2%
  • Adult social care, integrated care, and public health 36.2% - This department is responsible for our borough’s older and most vulnerable residents, including dementia services, support for adults with disabilities, and mental health support. This year we will spend £86 million delivering these vital services.
  • Finance and digital 7.6% - Teams like IT, Accounts and Commercialisation that give our staff the digital tools they need to be effective, and ensure that we’re spending our money efficiently. We’re securing value for money in all that we do, and this year we are spending £295k on better IT systems to enable our social care team to work more efficiently in their jobs supporting vulnerable people.
  • Housing and sustainable development and Homelessness Services 4.1% - Ensuring that our buildings and town centres are safe, sustainable and fit for the future. This department is working hard to deliver the first council homes in Merton in a generation.
  • Environment, civic pride and climate 15.6% - Looking after public spaces like parks, libraries and highways, as well as keeping people safe. Includes CCTV operators, air quality monitoring and climate action. This year, we’re investing £2.7m on shopping parades and high streets.
  • Children, lifelong learning and families 33.3% - This department looks after Children’s Social Care, schools, colleges and adult education. This year we will spend £3.6m on important school maintenance.
  • Innovation and change 3.2% - The behind the scenes services that help the council to function. It includes things like supporting residents with enquiries, upkeep of our buildings, making sure our democratic functions run smoothly and our human resources team.

How we are building a better Merton

We have set a balanced budget that invests in what really matters to our residents, investing into communities and neighbourhoods in all corners of the borough.

Our budget helps council services to be more efficient and attract outside investment, to maximise the value of every pound we spend in Merton – getting the best deal for local people.

We also use our funding to protect all our frontline services and meet the rising demand for our statutory duties in social care, education, and homelessness support.

10,000 households helped with Council Tax Support

£5 million for fixing potholes and maintaining and improving our roads and pavements

£3.6 million into upkeeping Merton’s schools

£3.5 million extra to help homeless families in Merton

£3 million into sports pitches and sporting infrastructure over the next four years

£2 million for parks and green spaces over the next four years

£2.7 million to improve our shopping parades and high streets

£86 million to provide care to Merton’s older and disabled residents

Building a better borough

Click the image to see a larger version or view the text version below.

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Diagram - Building a Better Borough
  • Thousands of local children benefitted from our free half term holiday clubs
  • 7,500 people got active at our free Big Sports Day
  • We made the borough safer by upgrading our 24-hour CCTV network
  • We planted 750 new trees
  • 650 kids at ten schools got free music lessons through our Mini Musicians programme
  • Established a new monthly market in Mitcham town centre
  • We delivered our pop-up tip pilots across Merton
  • Canons House and Grounds became our eighth Green Flag park
  • Work started on building the first new council homes in a generation
  • Thousands of residents used our kids and over- 65s swim free schemes
  • Nearly 100% of our schools in Merton are rated Good or Outstanding
  • Supported the delivery of step free access at Tooting and Motspur Park Stations
  • Our Borough of Sport Activity Finder visited 24,000 times
  • Four local playgrounds and a paddling pool were upgraded in time for summer

Read the Leader of the Council’s update

Our Council Leader, Councillor Ross Garrod, has written to all households and businesses in the borough to discuss his plans for the year ahead.