The Cabinet of Tower Hamlets Council met on Wednesday, 3 January 2024, to discuss and approve proposed changes to the Council's fees and charges for the upcoming financial year, as well as to consider the Budget Report for 2024-25 and the Medium-Term Financial Strategy (MTFS) for 2024-27.

Fees and Charges 2024-25

The Cabinet approved proposed changes to the Council's fees and charges for the financial year 2024-25. These changes, detailed in Appendix 1 and Appendix 2 of the Fees and Charges 2024-25 Report¹, affect a wide range of services, including adult social care, school meals, arts and music, holiday childcare, sports and physical activities, parking, street trading, and planning and building control. The general principle behind these increases is to align charges with the rate of inflation (RPI) where possible, while also considering service demand, projected costs, and benchmarking against other local authorities. The Council has also been mindful of the impact on residents, particularly concerning the cost of living crisis, and has sought to protect areas of priority interest.

Budget Report 2024-25 and Medium-Term Financial Strategy 2024-27

The Cabinet considered the Budget Report for 2024-25 and the Medium-Term Financial Strategy (MTFS) for 2024-27². Mayor Lutfur Rahman expressed pride in the proposed budget, highlighting its commitment to protecting and empowering residents. Key aspects of the budget include building on previous investments, ensuring long-term financial sustainability, delivering savings and efficiencies while maintaining frontline services, and an additional £5 million investment in waste management services.

Councillor Saied Ahmed, Cabinet Member for Resources and the Cost of Living, elaborated on the budget, noting a reduction in the previously budgeted use of reserves by £4 million over the MTFS period, demonstrating progress in long-term financial security. He also highlighted new investments in services totalling £18 million for the next year and a robust approach to savings that would protect frontline services, avoid compulsory redundancies where possible, and increase permanent employment opportunities.

Julie Lorraine, Corporate Director Resources and Section 151 Officer, commented on the Council's strong financial position, stating it was at no risk of a section 114 notice ³. She acknowledged risks associated with the budget, such as pressures in demand-led services like temporary accommodation, and noted mitigations such as rent increases to fund additional housing and investment in current stock. Lorraine also mentioned the future of business rates and the potential impact of national changes on the borough.

The Cabinet resolved to propose a draft General Fund Revenue Funding Requirement of £458.661 million for 2024-25, subject to final Local Government Finance Settlement adjustments. They also proposed levying a 2% Adult Social Care precept for 2024-25. The Corporate Director Resources was authorised to make necessary changes to the draft budget following the receipt of the Local Government Finance Settlement. The Cabinet noted the draft position of the Council's reserves and approved housing rent and service charge increases for 2024-25, including a 7.7% increase in housing rents (CPI +1%). Furthermore, they agreed to continue with the National Schools Funding Formula adopted in 2019-20, set the Minimum Funding Guarantee as close to 0.5% as affordable, and maintain the structure of the Early Years Funding Formula with revised hourly rates. The Local Council Tax Reduction Scheme will remain unchanged for 2024-25. The Cabinet also noted the school funding position, including the overall Dedicated Schools Grant (DSG) deficit, and the equalities implications.

Fees and Charges 2024-25

The Cabinet approved proposed changes to the Council's fees and charges for the financial year 2024-25. These changes, detailed in the Fees and Charges 2024-25 Report¹, impact a wide range of services. The report outlines increases to discretionary and statutory fees and charges, with the general principle being to increase them by RPI to match inflation. Benchmarking with other local authorities was conducted, and the Council considered the impact on the cost of living for users of these services.

Key areas affected include:

• Adult Social Care: Charges for community-based and residential care services are informed by financial assessments and Disability Related Expenditure (DRE) allowances. Standard DRE allowances were detailed, with provisions for individual assessments for higher costs.
• Children's Services: School meal prices for adults will increase, while primary school meals remain free for children. Fees for arts and music services, holiday childcare schemes, and integrated early years training will also see adjustments, generally in line with inflation.
• Communities: Hire charges for venues like the Brady Arts & Community Centre and Kobi Nazrul Centre will increase. Pitch fees for sports facilities will rise in line with inflation, with concessions for local residents from low-income families. Parking tariffs for resident, business, contractor, and public service permits will see changes, including a new banding system for electric vehicles and increased surcharges for second and third permits. Car club permit prices will increase by RPI or CPI. Paid parking charges, both on and off-street, will increase in line with RPI. Suspensions, dispensations, and skip licences will also see increases. Waste operations commercial waste charges will largely remain unchanged, with a focus on enhancing enforcement.
• Housing and Regeneration: Planning and Building Control fees are being reviewed, with increases proposed where they are below benchmarked levels or to cover inflationary pressures. New hourly rates for Building Safety Regulator (BSR) work will be introduced. Venue hire charges for community hubs will see increases in line with inflation, with lower rates for residents and community groups.
• Resources: Fees for registration of births, deaths, and marriages will be reviewed to ensure competitiveness and meet income targets. Court costs for Council Tax and Business Rates defaults will be considered. Charges for Idea Stores and Idea Store Learning will increase in line with inflation. Financial deputyship and appointeeship charges will be adjusted in line with Ministry of Justice and Court of Protection directives.

The report also noted that equality impact screenings were undertaken on all proposed changes to fees and charges.

Budget Report 2024-25 and Medium-Term Financial Strategy 2024-27

The Cabinet considered the Budget Report for 2024-25 and the Medium-Term Financial Strategy (MTFS) for 2024-27². Mayor Lutfur Rahman expressed pride in the proposed budget, highlighting its commitment to protecting and empowering residents. Key aspects of the budget include building on previous investments, ensuring long-term financial sustainability, delivering savings and efficiencies while maintaining frontline services, and an additional £5 million investment in waste management services.

Councillor Saied Ahmed, Cabinet Member for Resources and the Cost of Living, elaborated on the budget, noting a reduction in the previously budgeted use of reserves by £4 million over the MTFS period, demonstrating progress in long-The Cabinet of Tower Hamlets Council met on Wednesday, 3 January 2024, approving proposed changes to the Council's fees and charges for the financial year 2024-25 and considering the Budget Report for 2024-25 alongside the Medium-Term Financial Strategy (MTFS) for 2024-27.

Fees and Charges 2024-25

The Cabinet approved proposed changes to the Council's fees and charges for the financial year 2024-25, as detailed in the Fees and Charges 2024-25 Report¹. These adjustments affect a wide range of services, including adult social care, school meals, arts and music, holiday childcare, sports and physical activities, parking, street trading, and planning and building control. The general principle for these changes is to increase fees in line with inflation (RPI), considering factors such as service demand, projected costs, and benchmarking against other local authorities. The Council has also taken into account the impact of the cost of living crisis on residents, aiming to protect essential services.

Key areas with fee adjustments include:

• Adult Social Care: Charges for community-based and residential care services will be informed by financial assessments, with Disability Related Expenditure (DRE) allowances considered.
• Children's Services: While primary school meals remain free for children, adult meal prices will increase. Fees for arts and music services, holiday childcare schemes, and early years training will also be adjusted, generally reflecting inflation.
• Communities: Hire charges for venues such as the Brady Arts & Community Centre and Kobi Nazrul Centre will increase. Sports pitch fees will rise in line with inflation, with concessions available for local residents from low-income families. Parking tariffs for various permits, including resident, business, and contractor permits, will see changes, with a new banding system for electric vehicles and increased surcharges for multiple permits. Car club permit prices will also increase. Suspensions, dispensations, and skip licences will be subject to higher charges. Commercial waste service charges will largely remain the same, with an increased focus on enforcement.
• Housing and Regeneration: Planning and Building Control fees are being reviewed, with increases proposed where they are below benchmarked levels or to account for inflation. New hourly rates for Building Safety Regulator (BSR) work will be introduced. Venue hire charges for community hubs will increase in line with inflation, with preferential rates for residents and community groups.
• Resources: Fees for registration of births, deaths, and marriages will be reviewed to remain competitive and meet income targets. Court costs for Council Tax and Business Rates defaults will be adjusted. Charges for Idea Stores and Idea Store Learning will increase in line with inflation. Financial deputyship and appointeeship charges will be updated according to Ministry of Justice and Court of Protection directives.

The report also confirmed that equality impact screenings have been conducted for all proposed fee and charge changes.

Budget Report 2024-25 and Medium-Term Financial Strategy 2024-27

The Cabinet considered the Budget Report for 2024-25 and the Medium-Term Financial Strategy (MTFS) for 2024-27². Mayor Lutfur Rahman expressed pride in the proposed budget, highlighting its commitment to protecting and empowering residents. Key aspects of the budget include building on previous investments, ensuring long-term financial sustainability, delivering savings and efficiencies while maintaining frontline services, and an additional £5 million investment in waste management services.

Councillor Saied Ahmed, Cabinet Member for Resources and the Cost of Living, elaborated on the budget, noting a reduction in the previously budgeted use of reserves by £4 million over the MTFS period, demonstrating progress in long-term financial security. He also highlighted new investments in services totalling £18 million for the next year and a robust approach to savings that would protect frontline services, avoid compulsory redundancies where possible, and increase permanent employment opportunities.

Julie Lorraine, Corporate Director Resources and Section 151 Officer, commented on the Council's strong financial position, stating it was at no risk of a section 114 notice ³. She acknowledged risks associated with the budget, such as pressures in demand-led services like temporary accommodation, and noted mitigations such as rent increases to fund additional housing and investment in current stock. Lorraine also mentioned the future of business rates and the potential impact of national changes on the borough.

The Cabinet resolved to propose a draft General Fund Revenue Funding Requirement of £458.661 million for 2024-25, subject to final Local Government Finance Settlement adjustments. They also proposed levying a 2% Adult Social Care precept for 2024-25. The Corporate Director Resources was authorised to make necessary changes to the draft budget following the receipt of the Local Government Finance Settlement. The Cabinet noted the draft position of the Council's reserves and approved housing rent and service charge increases for 2024-25, including a 7.7% increase in housing rents (CPI +1%). Furthermore, they agreed to continue with the National Schools Funding Formula adopted in 2019-20, set the Minimum Funding Guarantee as close to 0.5% as affordable, and maintain the structure of the Early Years Funding Formula with revised hourly rates. The Local Council Tax Reduction Scheme will remain unchanged for 2024-25. The Cabinet also noted the school funding position, including the overall Dedicated Schools Grant (DSG) deficit, and the equalities implications.

Other Key Discussions and Decisions:

The Cabinet also discussed and made decisions on several other proposals aimed at improving efficiency and generating income:

Service Restructures and Efficiencies:

Several proposals focused on restructuring services to achieve efficiencies and savings. These included:

• Legal Services: A proposal to reduce agency spend and remove supernumerary posts aims to save £50,000 by improving recruitment and retention of permanent staff.
• IT Management Review: A review of IT management structures is proposed to reduce costs by £180,000 by streamlining the number of heads of service and potentially reducing the IT service's overall capacity.
• Waste Operations: A significant investment of £5 million is planned to improve waste services, including introducing time-bands for collections, enhancing street cleansing, and reviewing commercial waste services. This is expected to generate additional income.
• Leisure Service Insourcing: The Council is moving towards insourcing its leisure service from GLL by May 2024, aiming for greater control and potential for improved service delivery and income generation. This involves a projected net operating cost of £910,834 in 2024-25, with an anticipated increase in income from membership, events, and other activities.
• Sports and Physical Activity (SPA) Integration: Integrating SPA services with Young Tower Hamlets aims to create a more cohesive wellbeing offer and generate income.
• Service Restructure - Employment and Skills Service: This proposal aims to save £176,000 by restructuring the Employment and Skills Service, focusing on key mayoral priorities like supporting micro-businesses and generating community wealth, while also seeking to secure external funding.
• Service Restructure - Environmental Health and Trading Standards: This restructure aims to align teams with the new corporate directorate structure, potentially leading to savings of £164,000 by deleting managerial posts and streamlining reporting lines.
• Service Restructure - Highways and Transportation: A restructure is proposed to align services with mayoral priorities and improve efficiency, potentially leading to savings of £100,000 through role clarification and streamlining.
• Service Restructure - Supporting Families: A proposal to transfer targeted family support for 11-19 year olds from Early Help to the Targeted Youth Offer aims to create savings of £250,000 by deleting five currently vacant posts.
• Service Restructure - Planning and Building Control: This proposal aims to restructure support services within Planning and Building Control to improve efficiency and customer focus, with an estimated income generation of £50,000 in 2024-25.
• Service Restructure - Human Resources: A proposal to remove agency spend and delete vacant posts aims to save £50,000.
• Service Restructure - Registrars: This proposal aims to generate £22,000 in income by increasing fees for wedding reception parties and exploring new income streams, while also restructuring the service to focus more on commercial activities.

Income Generation:

Several proposals focused on generating additional income for the Council:

• Street Advertising: An initiative to generate income from lamppost banners and boundary signage is projected to bring in £100,000 in 2024-25, with further potential in subsequent years.
• Electric Vehicle (EV) Charging Points: The Council plans to procure EV chargers across the borough, funded by suppliers through concession contracts, with the aim of generating income from site fees and revenue sharing. This is projected to generate £300,000 in income over three years.
• Construction Management Plan (CMP) Charge: A new fee will be introduced for the review, approval, and monitoring of Construction Management Plans, aiming to generate £200,000 in income from 2025-26 onwards.
• Commercial Waste Service Review: The Council aims to increase income from its commercial waste service by £500,000 by separating collections, offering a wider range of services, and enhancing enforcement.
• Parking Savings: Various measures are proposed to increase income from parking, including changes to emission banding for resident permits, increased surcharges for second and third permits, diesel surcharges, and adjustments to short-stay parking tariffs. These measures are projected to generate £4,979,000 over three years.
• Fees and Charges Increases: A general principle of increasing fees and charges by RPI inflation is being applied across many services, with some discretionary charges seeing higher increases to reflect costs and market rates. This is projected to generate £830,000 in income over three years.
• Idea Stores - Stock Fund: A reduction in book purchases is proposed, aiming to save £30,000 per year, with the understanding that this will impact the availability of new materials.
• Idea Stores - Income Generation: The proposal aims to increase income from the Idea Stores through various means, including charging for room hire and potentially other services.
• Financial Deputyship: Fees for acting as property and affairs deputy and for money management for appointee clients will be adjusted in line with Ministry of Justice and Court of Protection directives.
• Planning and Building Control Fees: Discretionary fees for pre-application advice and other services are being reviewed and increased where appropriate, with a projected income generation of £50,000 in 2024-25.
• Venue Hire: Charges for hiring council venues, including community hubs and the Limehouse Centre, will be increased in line with inflation, with different rates for residents, community groups, and commercial hire.

Budgetary Adjustments:

• Budget Report 2024-25 and Medium-Term Financial Strategy 2024-27: The Cabinet proposed a draft General Fund Revenue Funding Requirement of £458.661 million for 2024-25. They also proposed levying a 2% Adult Social Care precept.
• Housing Revenue Account (HRA): Housing rents for all properties will increase by 7.7% for 2024-25 (CPI +1%), generating an estimated £5.6 million in additional income. Service charges will also be adjusted to reflect costs.
• Removal of Corporate Contingency Budget: A contingency budget of £50,000 held in the Chief Financial Officer's cost centre will be removed, with any unforeseen expenditure to be managed through directorate budgets.
• Transfer of Funding Sources: Several proposals involve shifting funding sources, such as using the Public Health Grant Reserve to fund General Fund expenditure (£1.75 million per annum for three years) and using CIL income to fund General Fund posts within Planning and Building Control (£50,000 in 2024-25).
• Fleet Electrification: An investment of £900,000 is planned for the procurement of electric vehicles and charging infrastructure, with projected savings from reduced leasing and fuel costs.
• Pension Fund Deficit Payment: A saving of £1,000,000 is proposed from the pension fund by reducing the employer's contribution rate.

The meeting also noted the Council's strong financial position, with no risk of issuing a Section 114 notice, and highlighted the ongoing challenges of increasing service demand and inflationary pressures. The decisions made reflect the Council's commitment to financial sustainability while continuing to invest in and protect essential services for residents.