An East London borough is seeking government approval so it can raise council tax by 9.99 per cent to help cope with ongoing financial pressures. Newham Council has already asked the government for Exceptional Financial Support (EFS) and as part of its application has asked to increase council tax beyond the current maximum of 4.99per cent.
The borough is facing a projected budget gap of £151million over the next three years, of which £106m is made up entirely of temporary accommodation costs which the council has called a ‘crippling burden’. According to a cabinet report, the council has identified £79m in savings through cost cutting measures such as the proposed sale of Debden House Centre, as well as plans to move employees from its main Dockside office to other parts of the borough.
The council believes it will be able to reduce its predicted budget gap to £51m in 2025/26 and £78m by 2027/28 through the savings it has identified. If the council is allowed to increase council tax by 9.99per cent, it estimates a further £6m could be generated in savings – which could further reduce the council’s 2025/26 budget gap to £46m.
East Ham Town Hall, where Newham Council has most of its meetings
(Image: David Nicholls / WikiCommons)
During last week’s cabinet meeting (January 9), Zulfiqar Ali, cabinet member for finance and resources, said the council is hopeful they will be able to sell off assets in a ‘timely manner’ if the government approves its EFS package. Cllr Ali said: “By no means, the report says clearly that this is a sustainable financial strategy – this will only get [us] through the next two to three years, and the problem will continue to remain unless the government delivers its commitment to support local authorities.
“We can easily demonstrate that we’ve looked at everything we have and we have done everything we could have done in order to find savings, efficiencies and service reductions where possible and sensibly.” If Newham is allowed to raise council tax by 9.99per cent, the average Band D property would see its annual council tax increase from £1,252.94 to £1,378.23 – which does not include the Greater London Authority (GLA) precept.
Cllr Ali said those who are eligible for the Council Tax Reduction Relief Scheme will see their council tax bill reduced by 80per cent. The mayor of Newham, Rokhsana Fiaz said the council’s budget proposals had been a ‘really tough process’ and thanked officers and cabinet members for their involvement in recent months.
Ms Fiaz said if the increase is approved, Newham will remain the seventh lowest for council tax in London. She added: “We have not been flagrant in our obligations and duties to serve our residents well, but also [to] ensure that we protect and support those who are amongst the most vulnerable.” The budget proposals will need to be voted through at a full council meeting at the end of February.
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