COUNCIL chiefs have written to the new prime minister urging him to rethink massive budget cuts and a plan to increase tax to wealthy land-owners.

Westminster City Council said that the Labour government’s new “family home tax” will disproportionately hit Westminster residents.

PM Andy Burnham has also suggested he may introduce a new land tax that the Conservative administration running city hall in Victoria said “would hammer home even more costs for families in our city”.

It came in the week that Labour and the Conservatives traded blows with each party blaming the other for wasting tens of millions of pounds of public money.

Cllr Paul Fisher, the council’s finance lead, said: “The Labour government’s so-called Fair Funding Review 2.0 has singled out Westminster for one of the biggest real-terms funding cuts anywhere in the country, with £100million being slashed from the council’s core budget.

To fill the gap, the government is forcing councils like ours to put up council tax and cut local services. That is before you count the Labour government’s new family home tax, officially the ‘High Value Council Tax Surcharge’, which disproportionately hits family homes in Westminster hardest… Burnham’s own plans for a land tax would hammer home even more costs for families in our city.”

West End ward’s Cllr Fisher defected from Labour to the Conservatives before the last election, said the council was prepared to submit a formal proposal for an alternative economic path.

“If the government rejects our case, we have the right to take it to a cross-party selector panel at the Local Government Association,” he said.

The Conservatives have already announced that council tax could double in the coming years and that many services will be affected by the £100million cut. They are blaming the last Labour administration – saying a recent review has uncovered more than £56million lost in mismanagement of various schemes and policies.

This includes the £27million handed to a bankrupt housing concern and also £19million that was spent from the council’s reserves so that a frozen council tax could be announced before the May election.

In response, the Labour group has published its own review of what it describes as “Conservative Wasteminster”.

Leader of the opposition Cllr Eleanor Ormsby said: “It is also particularly rich coming from the Westminster Conservatives, whose record on taxpayers’ money includes the internationally ridiculed Marble Arch mound, which cost residents around £6million, as well as the £50million of historic waste and poor financial management recently uncovered by us across our city.

“If the Conservatives are serious about securing more money for Westminster, they should be making the case for the council to receive a fair share of an overnight visitor levy. Instead, they have failed to make that case and continue to oppose its introduction.”