Newham Council has passed its budget, which includes selling off assets, making drastic cuts to services and an 8.99 per cent council tax increase.
The Labour-run council had requested exceptional financial support from the government in October last year, due to soaring temporary accommodation costs totalling £100 million over the next three years.
During last Thursday night’s full council meeting (27 February), dozens of people including Focus E15 housing campaigners gathered outside Stratford Old Town Hall to protest against the budget and the ongoing temporary accommodation crisis.
Newham mayor Rokhsana Fiaz said the borough’s temporary accommodation figures, which are the highest in London and the country, have created an "unprecedented financial burden".
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The borough has more than 6,000 households in temporary accommodation, while over 40,000 residents are on the council’s housing waiting list.
The temporary accommodation costs make up the council’s projected budget gap of £157m by 2027/28 – of which £84m has been forecast for 2025/26.
Cllr Zulfiqar Ali, cabinet member for finance and resources, said the council had to make ‘tough decisions’ to bridge the budget gap, including identifying savings worth £80m over the next three years – of which £32m are for 2025/26.
Overview and scrutiny committee chair Cllr Anthony McAlmont had concerns for the budget, and said ‘far too many’ of the committee’s recommendations had been rejected.
Cllr McAlmont added: “We should also not forget that the budget is balanced on the assumption that the executive will address the £84m budget gap through efficiency savings - even then a deficit of £47m is forecast.”
Savings include selling off Debden House and campsite in Essex (£300,000), cutting the council’s free pest control service (£43,000) and axing festival lights and street decorations for cultural celebrations such as Christmas and Eid (£200,000).
Plans to sell off the 50-acre campsite received backlash from the local community, and a petition signed by around 4,000 people was launched to try and save it.
Statutory deputy mayor Sarah Ruiz previously said the site’s main users were not from Newham and it would need ‘substantial investment’ to continue running.
Low-income residents who are part of the council tax reduction scheme will also see the amount of support drop from 90 per cent to 80 per cent – though pensioners will not be impacted by this as this is set by the government.
Meanwhile council tax will increase by 8.99 per cent, which includes a 2 per cent adult social care precept.
This means the level of council tax for a Band D property has increased from £1,252.94 to £1,365.58 – which is a £112.64 increase.
Usually, councils are only allowed to increase council tax by a maximum of 4.99 per cent which includes the 2 per cent social care precept.
However Newham’s financial situation is so troubling the council asked the government for permission to raise council tax by 8.99 per cent.
During Thursday night’s meeting, opposition councillors from the Green party and Newham Independents presented their own amendments to the budget.
Green party councillor Nate Higgins said his party would also pledge to reverse the sale of the campsite, warning "once it’s gone, it’s gone forever".
Cllr Higgins also raised concerns over reducing the council tax reduction scheme by 10 per cent: “The scheme is a lifeline for thousands of Newham residents.
“Households will see bills soar for some by more than £200 per year. This administration is taking £3m directly from the pockets of our poorest residents.”
The Green party said it would find savings by reducing the council’s communications and policy team, scrapping the deputy cabinet members’ allowances, while investing in new knife amnesty bins and freezing rents for market traders for 2025/26.
Mehmood Mirza from the Newham Independents said the party’s alternative budget would look at freezing council tax, extending free school meals to secondary school pupils and would reverse the sale of Debden House and campsite.
Cllr Mirza said: “It would be remiss of us not to mention the crisis in temporary accommodation.
"This is one of the most pressing issues facing our borough, and without drastic action, it has the potential to severely impact the rest of the council’s budget.
"We will ensure this matter is addressed with urgency and long-term solutions.”
Ultimately the Labour administration’s budget was passed with 44 votes in favour and 5 against, with the proposed amendments being rejected.
