Council tax in Newham could increase by two per cent

Proposals to increase council tax will be discussed at a cabinet meeting on Monday. Picture: Ken Mea

Proposals to increase council tax will be discussed at a cabinet meeting on Monday. Picture: Ken Mears - Credit: Archant

Council tax in Newham could be increasing.

In a mid-year review of the council budget on Monday, councillors will be asked to consider a rise of two per cent.

Council tax in the borough has been frozen for the last 10 years, but because of this, it’s estimated the council has lost £82 million which could have been used to fund local services.

The report states: “Funding for local government continues to be squeezed and the in-year budget position indicates significant issues in its delivery.

“There will inevitably be difficult decisions to be made by members in the coming months. To ensure that the council operates from a financially sustainable base and is in a position to effectively deliver the mayoral priorities and meet the needs of our residents, these decisions are vital.”

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Following her election, new mayor Rokhsana Fiaz ordered a financial ‘health check’ of the budget, in a bid to make it more open and transparent.

Because of the freeze on council tax, a population increase which has put extra pressure on services, and cuts to council funding from central government, the Chartered Institute of Public Finance and Accountancy (CIPFA), who conducted the review, recommended the council considers a tax increase.

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A one per cent increase would generate £750,000, while central government has recommended raising rates by three pc. The budget review proposes a two pc increase.

The report adds: “After a number of years of discouraging local authorities from raising council tax rates, the last three years has seen a shift in central government policy, which increasingly expects councils to increase council tax to replace funding withdrawn by government.

“Discussions with the mayor and other cabinet members have indicated that the new administration is minded to shift to a new strategy of low, but steady, increases.”

The report assures the mayor will ensure support is in place for low-income households. She has asked for a review of the Council Tax Reduction Scheme, which lowers tax for residents who might be struggling to pay it.

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