Councillor Zulfiqar Ali says Newham will be ‘moving from austerity to stability’ as the town hall is set to receive £30m more in government spending this April than it expected, reports Nick Clark, Local Democracy Reporter

Newham Town Hall and (inset) cabinet member for finance Zulfiqar Ali

Proposed spending plans mark a “turning point” away from austerity at Newham Council, a top councillor has said.

Labour councillor Zulfiqar Ali said increased government funding meant the council would be “moving from austerity to stability”.

However the council’s draft budget still includes more than £101million worth of spending cuts and “savings” over the next three years. Newham mayor Rokhsana Fiaz said the increased funding was “not a licence to spend.”

Council leaders had been considering asking the government for exceptional financial support last year.

They warned the council faced “difficult decisions” to plug a predicted £53m funding gap in the 2026/27 financial year. These could have included an 8.99% council tax rise.

It came as councils across the country have been struggling to make their funding cover the rising costs of social services and homelessness.

Newham has the highest number of people in temporary housing in England – more than 7,500 households – costing the council some £100million a year.

However the council says changes to how the government allocates funding mean it’s set to receive £30m more in April than it expected.

The government’s fair funding review adjusted council funding based on up-to-date population data and ways of measuring deprivation that take greater account of housing costs.

Speaking at a cabinet meeting today (8th) Cllr Ali said the increased changes represented “Labour’s fairness finally applied”.

Cllr Ali said it “marks a turning point for the council and the people that we serve”, adding “we’re moving from austerity to stability.”

However budget proposals still include £16.8m worth of new “savings” to be made in the financial year starting in April.

These include closing at least one children’s centre site and merging children’s centres with family hubs, to save £1m.

The council is also considering cutting its council tax discounts to the poorest households, from 80% to 70%.

Other proposals include moving to fortnightly waste collections and increasing the prices of parking fees and permits.

These will come on top of £25m worth of “savings” for this year already approved in previous spending plans. The council also aims to cut £15m from its temporary accommodation spending.

Mayor Fiaz said the increased funding meant the council could even leave the council with “surplus” funds in 2027 and 2028. However she said this was “not a licence to spend”.

She said: “That money needs to be banked. It needs to be held back.”

Fiaz said it was “remarkable” that the council was able to propose a balanced budget. However she said it had taken a “challenging, complex, difficult, painful, hard set of discussion”.

She said: “Insolvency – bankruptcy – is not in our vernacular. It’s not something that we would have ever countenanced.”

The final budget is set to be voted on at a meeting of all councillors on Thursday, 26th February.

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