The Cabinet of Tower Hamlets Council met on Wednesday, 3 January 2024, to approve proposed changes to fees and charges for the upcoming financial year and to endorse the draft budget for 2024-25 and the Medium Term Financial Strategy (MTFS) for 2024-27. The meeting, chaired by Mayor Lutfur Rahman, saw the approval of new discretionary and statutory fees and charges, alongside a budget that includes significant investment in waste management services and a commitment to protecting frontline services.

Fees and Charges 2024-25

The Cabinet approved proposed changes to fees and charges for the financial year 2024-25. These changes affect both discretionary and statutory fees and are intended to align with prevailing economic circumstances and ensure value for money. Councillor Saied Ahmed, Cabinet Member for Resources and the Cost of Living, introduced the report, highlighting that the proposed charges relate to existing services. Julie Lorraine, Corporate Director, added that benchmarking with other local authorities had been conducted, and the Council had considered the impact on residents, particularly concerning the cost of living. Services identified as priority areas for residents, such as waste services and market trading, have been protected.

The Cabinet resolved to:

• Approve the proposed discretionary fees and charges as detailed in Appendix 1 of the report.
• Approve the revised statutory fees and charges as detailed in Appendix 2 of the report.
• Delegate authority for amendments to fees and charges, including those arising from Equality Impact Assessments, to the relevant Corporate Director in consultation with the Lead Member and the Mayor.
• Agree that all increases and new fees be implemented from 1 February 2024 where possible, and endorse the strategy for inclusion in the MTFS, with a review scheduled in three years.

Budget Report 2024-25 and Medium Term Financial Strategy 2024-27

The Cabinet endorsed the draft budget for 2024-25 and the Medium Term Financial Strategy (MTFS) for 2024-27. Mayor Lutfur Rahman expressed pride in the proposed budget, stating it reaffirms the Council's commitment to protecting and empowering residents. Key aspects include building on previous investments, ensuring fiscal sustainability, delivering savings and efficiencies, and maintaining investment in frontline services like housing and support for those facing the cost-of-living crisis. A notable investment of an additional £5 million is allocated to waste management services, which will fund new frontline workers, vehicles, and service improvements.

Councillor Saied Ahmed elaborated on the budget, noting a reduction in the previously budgeted use of reserves by £4 million over the MTFS period, demonstrating progress towards long-term financial security. He also highlighted new investments in services totalling £18 million for the upcoming year. The budget's savings criteria are designed to protect frontline services, avoid compulsory redundancies where possible, and increase permanent employment by reducing reliance on temporary staff. There will be no reduction in frontline staffing or services.

Julie Lorraine, Corporate Director Resources and Section 151 Officer, commented on the Council's strong financial position, confirming it is not at risk of a Section 114 notice¹. However, she noted ongoing risks, particularly in demand-led services such as temporary accommodation, and outlined mitigations including rent increases to fund additional housing and investment in current stock. The Council's reliance on income generation was also discussed, with assurances that risk profiling and stress testing would be undertaken to ensure financial resilience. The potential impact of future changes to business rates was also raised, with the borough being particularly vulnerable due to its strong business rates base. A further MTFS report will be presented on 31 January to explore risks and additional mitigations in more detail.

The Cabinet resolved to:

• Propose a draft General Fund Revenue Funding Requirement of £458.661 million for 2024-25, subject to final adjustments from the Local Government Finance Settlement.
• Propose to levy a 2% Adult Social Care precept for 2024-25.
• Authorise the Corporate Director Resources, in consultation with the Mayor and Cabinet Member for Resources & Cost of Living, to make necessary changes to the draft budget following receipt of the Local Government Finance Settlement, for further consideration on 31 January 2024.
• Note the latest draft position of the Council's reserves, subject to final audit.
• Approve housing rent and service charge increases for the Housing Revenue Account (HRA), including a 7.7% increase in housing rents for all properties for 2024-25 (CPI +1%).
• Note that the fees and charges changes proposed in another report are incorporated into the draft budget and MTFS.
• Agree that the National Schools Funding Formula adopted by Tower Hamlets in 2019-20 will continue for 2024-25, with factor value increases in line with the National Schools Funding Formula.
• Set the Minimum Funding Guarantee at as close to 0.5% as affordable.
• Agree that the structure of the Early Years Funding Formula remains unchanged, except for the introduction of the expanded two-year-old entitlement and new provision from nine months from September 2024, with revised hourly rates in line with the Early Years National Funding Formula.
• Note that the Local Council Tax Reduction Scheme will remain unchanged for 2024-25.
• Note the school funding position, including the overall Dedicated Schools Grant (DSG) deficit.
• Note the Equalities Implications as set out in Section 5 of the report.
• Note the Council Taxbase calculations in Appendix 4 of the report.