Tower Hamlets Town Hall
Highlights include:
- Scrapping council tax for foster carers - £780k to cover all costs
- £22.5m for adult social care to support increasing demand in addition to having introduced universal free homecare for all residents who need it
- £2.58m to extend food waste collection to 124k flats
- £453k for team to support home schooled children
- Pilot to extend leisure centre opening hours to 2am
- New fund to support tenants with rent increases, as well as significant investment in building new homes, upgrading existing council homes and meeting growing demand for temporary housing
- Continuation of universal free school meals at primary and secondary, and grants for school uniforms, college and university
- Balanced budget with increased resilience
Helping to address London’s housing crisis is at the heart of the council’s proposed three-year budget, along with new measures such as 100% council tax discount for foster carers.
The proposed budget sets aside an additional £100m over the next 5 years to improve council homes, taking the total investment to £345 million; £45m to help meet the growing demand for temporary housing following the 44% rise in temporary housing rent costs; and £400,000 for a new rent hardship fund for tenants where the increase is not met by existing housing benefit or universal credit.
The council’s wider housing commitments include delivering 4000 new affordable and social rent homes by May 2026, and up to 3,332 new homes to be unlocked through the Mayor’s Accelerated Housing Programme.
Support for children and young people is increased with new measures such as no council tax for foster carers (£780,000) and the creation of a team to support growing demand for home schooling (£453,000). They sit alongside the continuation of universal free school meals at primary and secondary schools, grants for school unforms, college and university, and running the 20 Young Tower Hamlets youth centres which have been opened since 2022, with the 20th youth centre being formally opened on 29 January.
When it comes to Adult Social Care, £22.5m has set aside to pay for support related to increasing demand, as well as the continuation of the roll out of meals on wheels and free homecare.
The proposed budget also builds on the increase in the borough’s recycling rate with £2.58m to extend the roll out of food waste collections to 124,000 flats. The council faces the toughest recycling challenge of any local authority being the most densely populated place in the country with around 87% of properties being flats.
The proposed budget was approved by the council’s Cabinet on Wednesday 28 January as part of a fully costed budget for the next three years. It will now go for final approval at the Full-Council budget setting meeting on Wednesday 25 February.
Executive Mayor of Tower Hamlets, Lutfur Rahman said:
“I am incredibly proud to be leading a council that has been able to invest unprecedented levels in frontline services through prudent management of our budgets. We have not only balanced the books, but we are introducing groundbreaking policies to provide even greater support to our residents with the cost of living.
“Tower Hamlets is leading the way when it comes to building new affordable homes to tackle the housing crisis, but we are also significantly upgrading our Council housing stock, while also introducing a new fund to support the most vulnerable tenants with rent increases.
“We already offer one of the best packages for young people in the country. We are building on that by removing the burden of council tax on foster carers in recognition of the vital role they play in our community and to encourage more to come forward.
“We are also prioritising support for vulnerable adults by investing millions more in Adult Social Care, introducing a Meals on Wheels service, having already scrapped charges for homecare services. Unlike other councils, we provide free homecare on a universal basis to all elderly or disabled residents who are assessed as having a need for care and support, ensuring everyone in our community receives the support they need.
“We are delivering all of this while maintaining a freeze on general council tax for low-income households, with the poorest households paying no council tax at all, and Tower Hamlets continues to offer the sixth lowest council tax rate in London.”
Children and Young People
The new measures build on existing funding for children and families including £13.7m youth investment to support the opening of 20 youth centres and delivering more than 5,000 youth-focussed sessions in 2025. As well as investing in youth services, the council has re-introduced its Education Maintenance Allowance (EMA) and University Bursaries, providing young people with £600 or £1,500 grants to help with costs while they study.
Tower Hamlets was the first local authority to offer universal free school meals to both primary and secondary school pupils. Since rolling out the scheme in secondary schools in 2023, more than 2 million meals have been served to secondary school pupils.
Last year, the council introduced £3million in funding for school clothing grants to help with the cost of school uniforms, providing up to 7,000 families a year with £50 per child entering primary school and £150 per child entering secondary school.
Environment
In addition to last year’s investment of more than £15m for waste and recycling services, the proposed budget commits a further £2.58million to make sure that all residents, including those in an estimated 124,000 flats, will be able to access weekly food waste collections.
Adult Social Care and Council Tax
In line with government expectations, there is a proposal for a 2.99% increase in general Council Tax and a 2% Adult Social Care precept to help pay for the increasing demand in services for older and vulnerable residents. This new budget includes £22.5million for adult social care, as well as £3m for the new Meals on Wheels service and residents may also benefit from the ongoing £4.9m agreed last year for free homecare services. Tower Hamlets is only the second council in the country to provide free homecare to all elderly or disabled residents who are assessed as having a need for care and support, regardless of income.
The council is maintaining a freeze on general council tax for low-income households, with the continuation of one of the most generous local council tax reduction schemes (LCTRS), which sees the poorest households paying no council tax at all.
The borough currently has the 6th lowest council tax rate in London, and the continuing council tax cost of living relief scheme will protect qualifying households from paying the proposed increase in council tax.
Cllr Saied Ahmed, Cabinet Member for Resources and the Cost of Living, said:
“We’re proud to put forward a budget that invests in good quality services and ensures continuing support for families experiencing ongoing cost of living pressures.
“We have put in place a dual approach which ensures both fiscal prudence and preventive investment. In practice that means that council funding will support residents right away, as well as create longer term savings through improved health and wellbeing that come from improved services and early intervention.”
Prudent budgeting and reserve building
Cabinet also approved a proposed draft General Fund Revenue budget of £482.151m for 2026-27, subject to any remaining changes from the final Local Government Finance Settlement and any other necessary adjustments expected before the 25 February budget setting full council meeting.
Increased financial resilience is expected to increase the council’s reserves by £50million over the three years, plus an extra £5m transformation reserve to drive efficient and effective council services.
Efficiencies across council services contribute to £6.42m in new savings proposed in this budget, as the council continues to make the most of the money it spends on behalf of residents.
Leisure
One example of an innovate approach to savings is the proposed pilot to extend gym opening hours to 2am at Whitechapel and Mile End leisure centres. Tower Hamlets has the youngest population in the country and feedback has shown that extended hours are priorities for young people, and shift workers, including NHS staff at the Royal London Hospital. In addition to health and wellbeing benefits of having a healthier population, extending the opening hours could generate an additional £50k income a year to be reinvested into council services.
You can view the proposed budget that's been signed off by Cabinet.
Posted on Thursday 29th January 2026