The Cabinet of Tower Hamlets Council met on Wednesday 4 January 2023 to discuss and approve the council's draft budget for 2023-24 and the medium-term financial strategy. Key decisions included freezing the core council tax rate, levying the adult social care precept, and approving changes to fees and charges.

Budget and Financial Strategy

The council's draft budget for 2023-24 and the medium-term financial strategy for 2023-26 were presented and approved. The budget aims to invest in key services, deliver on the Mayor's manifesto pledges, and support residents through the cost of living crisis. A significant aspect of the budget is the decision to freeze the core council tax rate, meaning it will not be increased for the upcoming financial year, excluding the adult social care precept.

The council will levy the 2% adult social care precept. This decision was made due to significant pressures in adult social care, including increasing numbers and complexity of care packages. While the government has provided some additional funding, it is considered temporary assistance. The council stated that levying this precept is necessary to provide vulnerable residents with the care they require.

The budget also outlines the utilisation of a portion of the council's reserves to fund expenditure priorities and balance the budget for the next year. This approach was defended by Mayor Lutfur Rahman, who drew a parallel to using reserves during the 2008 financial crisis, arguing that the current economic climate constitutes a rainy day.

Significant new investments are planned, including:

• Youth Services: £11.5 million allocated, with an additional £8.5 million per year on top of £3 million for outsourced youth services.
• Universal Free School Meals: £5.7 million for free school meals in both primary and secondary schools, making Tower Hamlets the only borough in the country to offer this provision.
• Education Maintenance Allowance and University Bursary Scheme: £1.1 million for the reintroduction of these schemes, which were cut by the previous administration.
• Community Safety: Investment in more police officers, times enforcement officers, and CCTV cameras.
• Environment: £5.4 million for electric waste vehicles and charging ports, £2.13 million for flat waste recycling, and £540,000 for low carbon fuel supply.
• Housing: A commitment to deliver 1,000 homes for rent per year, totalling 4,000 over the next four years, to address overcrowding.
• Home Care: £2.4 million allocated to make home care free again for vulnerable residents.
• Wan Ton Market Library: Funding allocated for its reopening.

During the discussion, Sirajul Islam, Leader of the Opposition, raised concerns about savings made in finance, procurement, audit, and legal staffing services, questioning the impact on overview and scrutiny. Councillor Saied Ahmed Ahmed, Cabinet Member for Resources and the Cost of Living, responded by detailing where savings would be made, primarily through the deletion of vacant posts or those covered by interim staff, and efficiencies gained through system improvements. He also highlighted that the savings in legal and democratic services included reductions in senior lawyer posts and adjustments to Member's allowance budgets.

The budget process was described as rigorous and robust, with detailed planning and fine-combing of budgets to align with the council's strategic plan. The administration emphasised its commitment to transparency and prudence, contrasting its approach with the previous administration's record of unsigned council accounts.

Fees and Charges

The cabinet also approved proposed changes to fees and charges across the council for the financial year 2023-24. These changes are intended to support the council in setting a balanced budget and funding community services. Discretionary charges have generally been increased in line with inflation, with rounding applied for practical purposes. The proposed changes have also considered service demand, projected costs, benchmarking with other local authorities, and the impact of economic factors.

Notably, the council will introduce fee-free parking concessions for one hour at specific market locations within the borough. While consultation on street trading charges had previously proposed increases in line with inflation, the current administration has decided not to increase these charges further for the next year. The report also highlighted a £2.7 million support package agreed in July 2022, part of a £5 million initiative to assist eligible households, school-aged children, and pensioners on pension credit.