Residents of Tower Hamlets have been warned that they face ‘painful’ decisions over which local authority services will face the axe.

The already deprived borough is facing a further massive cut in local spending imposed by the Government, the council’s Mayor has warned.

It has now embarked on a public consultation exercise to determine where the cuts will be made. The cuts are likely to be bitterly fought by some councilors and local community groups.

The council says that having achieved savings of £55m this year – out of an estimated £72m over three years – it now needs to save a further £45m in the same period up to 2014-5.

Mayor Lutfur Rahman said the Government was imposing ‘unprecedented’ cuts in spending. The authority has already shed 500 staff and decreased the use of outside agencies as part of a range of cost-cutting measures. The council say it has managed to keep libraries and children’s centres open, although neighbouring boroughs such as Lewisham have shut them down.

Mayor Rahman said: “With some of the highest levels of poverty in the country Tower Hamlets’ residents are being forced to bear the brunt of them.

“I believe that it is right and proper to protect the most vulnerable people within our community, and aim to close the funding gap by looking for further efficiency savings. However, this will not be enough and I will have to make some painful decisions over the next few months.

“To make sure that I make the best choices for residents I need to know which services matter to you. That is why I have launched Tower Hamlets’ budget consultation. This will provide you with the opportunity to tell the council where you think money should be spent and savings made.”

The council says it needs to make £18 million worth of savings in the coming year in order to close the funding gap left by government and the budget consultation aims to find out which services matter most to residents.

The budget for 2012/13 will be set by the council in February next year.

A series of roadshows will commence next week and the authority has also set up an online budget simulator to allow local people the opportunity to balance the books themselves. Further details can be found at www.towerhamlets.gov.uk/budget