Fury as council told to cut budget by £78 million

Mayor Lutfur Rahman

Mayor of Tower Hamlets Lutfur Rahman has slammed the “ideologically driven” budget cuts facing local government, as his cabinet announced that £4 million a month will have to be slashed from budgets from April 2011.

Wednesday’s mayor and cabinet meeting heard that “radical” savings of £78 million are required over four years, in the wake of funding cuts outlined in October’s government spending review.

Councillor Alibor Choudury expressed the cabinet’s “collective disgust” at the scale of the cuts and pledged that the council would “work to the nail” to protect frontline services.

However when pressed to identify which services would be prioritised, no guarantees were given to ring-fence any area of spending.

Cllr Choudury claimed that the cuts were “targeted against the poor” and would “tear the heart out” of the Tower Hamlets community.

The front-loading of funding cuts, which has already drawn strong criticism from the mayors of Lewisham and Hackney, mean that between £30 and £40 million will be removed from Tower Hamlets Council’s budget in the coming year alone.

The meeting also heard that 500 council jobs would go, with the majority affecting agency staff.

Job losses and other savings were likely to hit human resources, management, and IT services, Cllr Choudury indicated. The cabinet was seeking “creative” ways to save money, he said, suggesting that £7 million could be saved by selling excess council office space.

The mayor admitted that the full scale of cuts was still unknown and that more jobs could go. Two key local government funding channels, the Revenue Support Grant and the Area Based Grant, are yet to declare their settlements for the financial year 2011/12 and are likely to demand further savings from local authorities.

Cllr Choudury said that the council expected the settlement for that Area Based Grant to reveal a bias against inner cities. The grant allocates money to local governments based on area-specific requirements. Funding for issues that affect inner city areas, such as young people’s projects, is expected to be heavily cut.

“The cuts reflect a desire to move money from inner city areas to rural and coastal areas – in other words Tory areas,” said Cllr Choudury.

In sentiments that were echoed by the mayor, Cllr Choudury said that the council would be standing “shoulder to shoulder” with unions and “anyone willing to fight these cuts, which are targeted against the poor.”

Councillor Peter Golds, leader of the Conservative group, disputed the cabinet’s interpretation of the cuts. Speaking after the meeting he said it was “complete nonsense” to call the cuts ideological, pointing out that rural areas were facing savings as well, and that the Labour government had been planning deficit reduction on a similar scale. He voiced doubts over the budgetary responsibility of the current cabinet, claiming that the council would “fall to pieces” under the leadership of Rahman and his followers.

Mayor Rahman’s cabinet is still struggling to gain the backing of the majority Labour council and only has six of a possible ten members, all of them independents.

Mr Rahman, previously a Labour councillor, was removed as the party’s mayoral cabinet by the National Executive Committee in September, but subsequently ran successfully as an Independent.

Closing the budget discussions, the mayor appealed to the community and the council to back his cabinet in efforts to “protect the vulnerable and protect frontline services.”

“This cabinet will work with the community and with councillors who are willing to work with us, to minimise the impact of these cuts,” he told the meeting.

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