Against a background of Government cuts to funding for local Councils, pressures on services from growing demand and a legacy of issues that had not been tackled by the previous administration the proposals form a coherent package to protect boroughs key services in challenging times.
The Council estimates that there will be a budget shortfall of £59m in the next four years, with £17m of savings required in 2016/17.
To minimise cuts to vital services, and like nearly every other Council in London, Tower Hamlets is having to consider raising Council Tax. Government manipulation of the arrangements around Council Tax means that the grant that had previously supported Councils to freeze levels of Council Tax has disappeared, and George Osborne has also reduced Government support for adult care budgets, expecting Councils to raise the money that has been withdrawn. To address these issues the Mayor is proposing a one off increase in Council tax of 3.99% this year – though Mr Osborne’s 2% levy will impact in each of the next few years.
Residents have already been consulted on some possible savings suggestions and in response to this consultation the Mayor has agreed that proposals to have Ideas Stores open for fewer hours will not be pursued and that proposals for savings from a review of day services for older people will be held back until it is clear that satisfactory alternatives arrangements are in place.
Important decisions have been made to maintain the Council’s Local Council Tax Reduction Scheme. An important safeguard for the poorer members of the community, discretionary housing payments (DHP) will continue to be supported but government cuts will make it impossible to top up all rents in the way the council has until now.
Careful management of the Council’s resources does mean that some key frontline services can receive some additional funding and proposals are being looked at for additional funding for street cleansing services and for tackling anti-social behaviour. Positive steps are being taken to invest in the education of our young people with steps to support those continuing in education at 16+ and entering higher education.
Mayor John Biggs said ‘No one wants to see Council Tax rises but over the next four years we face a £59m budget short fall. Ongoing cuts to local government funding means that we need to make tough choices. We have proposed a balanced and prudent budget, driving out efficiencies while continuing to support those in need. “
The budget proposals will now be scrutinised by the Council’s Overview and Scrutiny Committee on 18th January 2016 and be put before full Council for agreement in February.