Hackney and Tower Hamlets Town Halls. Pic: Wikimedia Commons/Wikipedia
Special report by Elishah Luke and Ella Smith
Hackney and Tower Hamlets have increased council tax for the coming year at 4.99% and 2.99% respectively.
The rises comes on the backdrop of planned cuts in services for both boroughs and the councils’ struggle with high inflation. On Wednesday, Chancellor Jeremy Hunt is likely to spell out more cuts in funding for local government to help fund promised tax cuts.
Hackney Council said on their website that while they were able to overcome the £22m shortfall from the overall financial deficit of £74m in the updated budget, there remains £52m in savings that would need to be found over the next three years. This comes after Dawn Carter-McDonald, the interim chief executive, had warned that council services could be cut due to the deficit.
The council said that the 4.99% tax rise which was ultimately implemented in the budget was to generate about £5m to help maintain needed frontline services within the borough, and that most of the budget would focus on the areas of social care, homelessness, and children’s services.
Mayor Caroline Woodley said in a statement to EastLondonLines: “My first budget as Mayor of Hackney comes in hugely difficult financial circumstances, with the long-term impact of growing demand, rising costs and over a decade of government underinvestment putting huge pressures on local services across the country…Presenting a balanced budget in current circumstances has been a huge challenge. We cannot continue to run our services with the uncertainty of one-year settlements when we have seen the impact it is having on our residents.”
Mayor Caroline Woodley. Pic: Hackney Council
Tower Hamlets council said that its increase in council tax for 2024-25 was not excessive, thus circumventing the need for a referendum. The rise comes in the wake of the government ordering an inspection into Tower Hamlets council for the second time in a decade over allegedly questionable governance and spending practices.
The council said that the 2.99% tax increase was due to: “[o]ver a decade of austerity with less money coming from central government, combined with increased inflation, pressures on services and utility costs.” However, the council said that a Council Tax Cost of Living Relief Fund would be implemented to allow families with a total household income under £49,500 to apply for tax relief, and that that they would continue their 100% tax discount rate for those most in need, as well as an open access financial hardship fund.
Mayor Luftur Rahman said in a press release: “The council has worked hard to establish a responsible budget that invests in the future of our residents, protects households from the ongoing impact of the cost of living crisis, and continues to ensure that our finances are in a strong and stable position…”
Mayor Luftur Rahman. Pic: Luftur For Mayor.
The spending plans
Hackney Council’s newly updated budget includes:
• Nearly £150m for the maintenance and building of council homes
• Over £55m for the council’s net zero initiatives.
• £21m for improving school buildings and increasing provision for special educational needs.
• £16m for the maintenance of community investment in Hackney’s 58 parks and green spaces, including seven sport and leisure centres, and £1.7m for refurbished play areas.
• Over £12.3m in initiatives to make Hackney’s community safer, including support to help residents avoid the risk of violent crime.
• £10.2m for youth and early help services for families. This includes the council’s four youth hubs and a network of six adventure playgrounds.
• £4.7m on employment programmes within the borough.
The council also said that though the core funding for the budget would increase in line with inflation including various grants from the government, as well as income from council tax and business rates, it was not nearly enough to cover the acute cost and demand needs in the borough.
Mayor Woodley said: … [With] a need to find more than £50m in further savings over the next three years, we will have to keep making the case to the Government for proper, sustainable funding for local services.”
In Tower Hamlets, the range of new initiatives and funding now approved includes:
• Continued investment in young people with £750,000 for up to 1,250 students receiving Education Maintenance Allowance, increasing the amount they receive from £400 to £600 per year.
• A total of £1.2 million for the Mayor’s University Bursary, increasing the £1,500 per pupil award from 400 to 800 students.
• £248,000 a year to improve health and isolation by providing free swimming and aquatic sessions for women and girls over 16, as well as men over 55.
• £1.4 million to create a new Women’s Resource Centre to provide health, educational and employment advice.
• £1.5 million for a new culturally sensitive Drug Misuse Treatment Centre.
• £15 million capital investment to create an Institute of Academic Excellence – a world-class A-level institution that will look to improve attainment and send more local children to Oxbridge, Russell Group, and world-class universities.
• £20 million capital investment in an Adult Care Home (extra care), a standalone 50-60 bed adult care facility designed to promote independence and wellbeing.
• Investment in a Somali Resource Hub – a dedicated resource hub for the growing Somali population in Tower Hamlets.
These investments are in addition to measures introduced by the council in last year’s budget which will continue in 2024/25. They include universal free school meals for all primary and secondary school children, which are part of a wider £21 million investment made in young people, and £2.5 million in free Adult Homecare (effective 2025) with one key area of new investment being the £5 million earmarked to tackle waste problems, including litter and fly-tipping resulting from the increasing numbers of people living, working in, and visiting the borough.
Mayor Rahman said: ” We…know that times for many families are still very tough…the poor, the needy, and those people who don’t have much money in their pockets – we are protecting them…”
