Council approves budget with new investment in public services and support for residents

New Town Hall opened

Whitechapel Town Hall

  • Council to invest £5m into the waste service.
  • New revenue investment includes the popular Education Maintenance Allowance (EMA) and University Bursaries; free swimming for women and girls over 16 and men over 55; a new Women’s Resource Centre; and programmes to boost local tourism and civic engagement.
  • Introduction of new support through Council Tax Cost of Living Relief Fund alongside existing council tax reduction scheme.
  • New investment follows the council eclipsing its £37m savings target.
  • Recent LGA Peer Review praised the council’s ‘good record of financial management.’

The council has approved its budget for 2024/25 with a focus on investing in frontline public services, ongoing cost of living help, and extending support for young people and older residents. Councillors approved the new budget at a special Town Hall budget setting council meeting on Wednesday 28 February.

A key area of new investment is £5m to tackle waste problems, including litter and fly-tipping resulting from the increasing numbers of people living, working in, and visiting the borough. The range of new initiatives and funding now approved include:

  • Continued investment in young people with £750,000 for up to 1,250 students receiving Education Maintenance Allowanceincreasing the amount they receive from £400 to £600 per year.
  • A total of £1.2m 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.
  • Promotion of Tower Hamlets as a place to visit, work and invest in, including a project to recognise residents from diverse communities and involve them in council delivery.
  • £1.4m to create a new Women’s Resource Centre to provide health, educational and employment advice.
  • £1.5m for a new culturally sensitive Drug Misuse Treatment Centre.
  • £15m 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.
  • £20m 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 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 £21m investment made in young people, and £2.5m in free Adult Homecare (effective 2025).

Lutfur Rahman, Executive Mayor of Tower Hamlets, said:

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.

“We are committed to delivering first class public services and giving our residents every opportunity to thrive. We also know that times for many families are still very tough. That’s why we have introduced a new council tax cost of living relief fund, which will run alongside our existing council tax reduction scheme and protect many more households from council tax increases.

“I’m pleased that we are able to continue to deliver our groundbreaking universal free school meals, and to expand our college and university bursaries schemes that provide a financial lifeline for local families. We are investing further with £5m to keep our streets and estates clean, and almost £250,000 in new funding for women and girls, and older men with free swimming sessions.

“Elsewhere we have announced new support for older and vulnerable residents, continue to work with partners to deliver much needed new homes, measures to increase community participation, and are keeping our communities safe with the ongoing roll out of 40 new community enforcement officers (THEOs).”

New waste Service Investment

The £5million investment into the waste service will see key services frontloaded, with an additional 72 frontline workers recruited. This will include additional drivers; sweepers; and loaders, alongside new vehicles to tackle the waste emergency declared by the council last year.

The funds will enable enhanced sweeping beats – including an increase in nighttime and weekend rounds with a minimum of 15 hours a day around the borough’s busiest areas; new rapid response teams to proactively identify waste issues in parks, streets and open spaces; a modernisation of the service’s technology to maximise efficiency; and a new ‘Street Leaders’ scheme’ to encourage residents to assist the council in identifying and addressing waste hotspots.

The investment will also optimise collections through digitisation and improved management. While funding is initially for one year, it will be used to identify areas requiring recurring investment moving forward.

Cost of Living crisis

The recent annual resident survey found that residents were most concerned about the cost of living crisis, so support for residents remains at the heart of this budget. Financial support and increased investment in frontline services will continue to provide additional reassurance to those impacted hardest by the crisis.

The money is part of a £17m revenue investment package in areas including temporary housing accommodation to help people in London’s housing crisis; the insourcing of the council’s leisure services to provide residents with more health and economic opportunities; and measures to support vulnerable people like transport for children with special educational needs and disabilities (SEND).

Investment in housing

Housing also remains a top priority for the council, and significant investment in the development of affordable, family-sized homes continues, with the council on target to deliver 4,000 homes over the course of this term, both council-led and through various partnerships, while improving the condition of existing stock. Similarly, additional investment in the Future of Building Control in response to the Grenfell tragedy will improve the safety and security of existing homes in the borough.

Local government finances are under severe pressure following a perfect storm of more than a decade of austerity, rising energy prices, the cost-of-living crisis, inflation and interest rates.

Council tax

The general council tax element was frozen last year, and for 2024/25 it will increase by 2.99%. Tower Hamlets currently has the 6th lowest council tax in London and one of the most generous council tax reduction schemes for those who are less well off.

The increase is due to over a decade of austerity with less money coming from central government, combined with increased inflation, pressures on services and utility costs.

To support lower income households, the council will create a Council Tax Cost of Living Relief Fund, which means that people will be able to apply for relief on the council tax increase of 2.99% if their total household income is less than £49,500.

The council will continue to apply an up to 100% council tax discount rate for those who are most in need, along with an open access financial hardship fund.

Finances to rely on

Last year the council faced a difficult position including having to save £37m over the following three financial years. As a result of reviewing its budgets the council is pleased to announce that this target has been exceeded, with £43.4million – an additional £6.4 million – in savings identified, from areas including service restructures, income generation and transformation.

As well as delivering a balanced budget, the council has also made significant progress in resolving historic financial issues of audit, assurance and governance.

In the past few months, Accounts for 16/17, 17/18, 18/19 and 19/20 have all been signed off by independent auditors, our period of public inspection for the remaining draft accounts is now underway and the 20/21, 21/22 and 22/23 are all scheduled to go to Audit Committee in March 2024.

In October, the council’s outstanding Annual Governance Statements for 20/21, 21/22 and 22/23 were published on the council’s website after being approved by Audit Committee.

LGA Peer Review

In December 2023, the council’s financial handling was praised by the Local Government Association’s Peer Review challenge report (15 December) following a full week’s inspection in September.

The report said:

“Tower Hamlets has a good record of financial management, with strong foundations in place to maintain the future financial sustainability of the organisation. It is positive that the council is developing three-year financial plans which will enable investment in services and priority areas once completed.”


Posted on Thursday 29th February 2024