Jean Gray reports from Newham Council’s annual budget meeting

Newham Council's town hall in East Ham — East Ham Town Hall – (Credit – Neandra Etienne)

Newham Council leaders have voted through a massive programme of increases in council tax, rents and planned sales of local assets in a bid to stave off the threat of bankruptcy in the Borough.

At its 27 February meeting councillors agreed to increase Council Tax by 8.99 per cent for Newham residents from April, with some help available to those on low incomes.

The 2025/26 budget, which was tabled by members of the ruling Labour Party, was agreed by a majority vote, will also mean a rent increase of 2.7 per cent for those in social housing. There will be a 10 per cent cut in the Council Tax relief for the poorest in the Borough, excluding pensioners who will continue to get a higher reduction.

The Green Party and Independent opposition parties on the Council both put forward alternative budgets, which were rejected before the final vote agreed the Council’s proposals. The voting was: 44 in favour, five against, no abstentions but 18 council members did not vote.

Mayor Rokhsana Fiaz said the rate rise was ‘a difficult decision’, when times are tough for residents. “ But “, she added, “this rise ensures we can continue delivering the services that make a real difference in people’s lives — and our Council Tax is still the seventh lowest in London.”

The huge bill for temporary accommodation facing the Council and “14 years of Conservative government austerity that have ripped services apart” were blamed by Labour for the need to present a budget that opposition councillors described as “cruel’ and “prioritising bureaucracy over fairness”.

In a statement before the meeting, the Mayor outlined the main reasons for the crisis:

A forecast deficit of £157 million over the next three years, driven by rising pressures in temporary accommodation and social care demand for both children and adults;

£100 million of that funding gap directly attributable to the rising demand and costs of temporary accommodation;

£52 million of the £84 million projected gap in 2025/26 is due to the temporary accommodation costs.

She said that 75 per cent of the Council’s Budget “is now spent on care services and housing”.

She added that a request to the government for Exceptional Financial Support (EFS), has been agreed, which will permit £51.2 million of capital receipts from the sale of underused council assets to be used to cover revenue costs. Government support in the current year and for next year will mean Newham can balance its books.

At the same time, she said the Council is awaiting the outcome of the Government’s fair funding review and further actions to address London’s housing crisis.

The Council Cabinet will be considering a proposed Asset Strategy to provide the framework for the future management of assets, including the approach to disposals needed should the EFS bid be agreed.

Council opposition parties criticised the budget plans. Mehmood Mirza, leader of the Independent group, said the Labour leadership of the Council had let down local people. He presented alternative proposals that would:

Freeze Council Tax
Make the first parking permit free to residents
End the local emission-based charging that provides a ‘double whammy’ with Ulez
Provide free school meals for secondary school children
Scrap the People Powered Places projects and divert the money to front line services
Freeze allowances for Councillors

He described the temporary accommodation crisis as ‘the elephant in the room” and argued for more affordable social housing.

But his suggestions were rejected. Labour’s John Whitworth said there were already too many cars and measures to reduce car use would also benefit those who have to drive. It was also pointed out that the Council was not allowed to put the money for People Powered Places into other services.

For the Green Party, opposition Councillor Danny Keeling said they understood the sentiments in some of the Independent group’s proposals but they questioned whether they ‘understand the climate emergency’ and argued that their proposals meant investing in polluters.

In an impassioned speech, the Leader of the Greens, Councillor Nate Higgins said residents were being asked to pay more for less and were having austerity, that they didn’t vote for, forced upon them.

He claimed the Labour Government was forcing measures upon them. Addressing Labour Councillors, he said: “Where is your anger? What will you say to people, how will you look them in the eye?”

The Green Party’s alternative budget included:

Cancelling the sale of Debden House, a holiday centre for local children.
Freezing rents for market traders to boost small businesses
Reducing the ‘bloated’ Mayor and comms department within the Council
Providing more cycle parks
Stop the payment of £3m into reserves in order to keep council tax relief at current levels

This alternative budget was also rejected by the majority of councillors.

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