Peter Landman reports on February’s Newham Council Cabinet budget discussions

Newham Council's Dockside offices — Photo: wikipedia used under Creative Commons Attribution Share-alike license 2.0

Newham Council was meeting on 29 February to finalise the budget and spending plans for the coming two years including cuts in services to deal with a multi-million deficit.

Along with other councils across London and around the country this year’s budget has been difficult not least because the government has not provided their proper share of funding. The Council Cabinet was told that the Institute for Fiscal Studies calculated a shortfall of 17 percent in the funding from government.

The report on the financial situation third quarter of 2023-2024 shows the Council was in deficit from increased costs of £14.4 million in providing temporary accommodation for homeless people, an additional £5.7 million spending on Children’s Services and £2.9 million extra on Adult Social Care.

The Council cleared this deficit by drawing on its capital reserves which raise concerns about how to fund any future deficit.

The reason for overspending on temporary accommodation was explained as the high costs of overnight hotel accommodation and an increasing number of homeless people. High costs in special care homes for children with multiple needs were to blame for the increase in that area and, again, costly care packages and costs incurred on more rapid hospital discharges were to blame for the rise in adult social care costs.

The total budget for Newham Council is an eye-watering amount – £395 million. The main costs and actions in the coming year include:

Income:

• £7.5 million from a 4.49 per cent increase in Council Tax. (There is 90 percent Council Tax relief available for those who qualify.)

• An extra £3.2 million from the Greater London Authority which is taking over payment for free school meals.

• An increase in £3.1 million from the Government Adult Social Care Grant.

• An increase of £0.7 million from increased parking charges.

• A bonus in income from sales of council buildings and plots of land that have not been put into use.

Expenditure:

The Council faces three significant increases in costs:

• To find an extra £39 million just to maintain services on the same level, taking into account inflation and a rising population.

• To allocate an extra £17.5 million for increasing number of homeless cases.

• To top up the wages bill by £8.6 million to implement the latest staff pay award.

Despite these changes the Council Cabinet was told that there have been significant efficiency savings of £22 million covering a range of efficiency measures comprising departmental restructuring, rationalisation in purchasing, seeking out more funding opportunities, and rescoping of services.

Inevitably jobs have been affected and since July, at local team level, departments have been working to cut down on staff overtime, freeze recruitment and only enter into contracts, that are urgent.

The Cabinet was told that the Council will continue on its programme of property acquisitions for homeless people which avoids the costs of hotel stays.

The Council is aiming to find saving in children’s social care and adult social care by avoiding costly care packages and by, in particular, switching care plans to support for independent living.

Under the Capital Programme, the Council can still borrow for the acquisition and maintenance of assets.

There has been extensive borrowing on estate regeneration schemes currently underway across the Borough.

For more information contact: zukfiqar.ali@newham.gov.uk

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