The Tower Hamlets Cabinet met on Wednesday 3 January 2024, approving changes to fees and charges for the upcoming financial year and adopting the Council's budget and Medium Term Financial Strategy for 2024-27. The meeting also saw the introduction of the new permanent Director of Finance, Procurement and Audit, Abdulrazak Kassim.

Fees and Charges 2024-25

The Cabinet approved proposed changes to fees and charges for the financial year 2024-25. These changes apply to both discretionary and statutory fees. Corporate Director Julie Lorraine explained that the proposed charges relate to existing services and that benchmarking with other local authorities had been conducted with consideration for the impact on residents. Services such as waste management and market trading, which are considered important to the character of the borough and areas of priority for residents, have been protected. The approved changes will be implemented from 1st February 2024 where possible.

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

The Cabinet adopted the Council's budget for 2024-25 and its Medium Term Financial Strategy (MTFS) for 2024-27. Mayor Lutfur Rahman highlighted that the budget reaffirms the Council's commitment to protecting and empowering residents, building on previous investments, ensuring fiscal sustainability, and delivering savings and efficiencies while maintaining investment in frontline services like housing and support for those facing the cost-of-living crisis. A significant £5 million investment is earmarked for waste management services, including new frontline workers and improved vehicles.

Councillor Saied Ahmed, Cabinet Member for Resources and the Cost of Living, detailed key aspects of the budget, including a reduction in the use of reserves by £4 million over the MTFS period, demonstrating progress towards long-term financial security. The budget includes an £18 million investment in services for the next year. Clear criteria for savings have ensured that frontline services will be protected, compulsory redundancies will be avoided where possible, and permanent employment opportunities will be increased by reducing reliance on temporary staff. There will be no reduction in frontline staffing or services.

Julie Lorraine, Corporate Director Resources and Section 151 Officer, confirmed the Council's strong financial position, stating it is at no risk of a section 114 notice ¹. She noted that risks remain, particularly concerning demand-led services like temporary accommodation, but mitigations are in place, including rent increases to fund additional housing and investment in current stock. The Council's reliance on income generation was also discussed, with assurances that risk profiling and stress testing will be undertaken to ensure financial resilience. The future of business rates was mentioned, with the borough being vulnerable to potential national changes.

The Cabinet agreed to propose a draft General Fund Revenue Funding Requirement of £458.661 million for 2024-25, subject to final adjustments. A 2% Adult Social Care precept for 2024-25 will be levied. Housing rents for all properties will increase by 7.7% for 2024-25 (CPI +1%). The National Schools Funding Formula adopted in 2019-20 will continue for 2024-25, with factor values increased in line with the formula. The Minimum Funding Guarantee for schools will be set as close to 0.5% as affordable. The structure of the Early Years Funding Formula will remain unchanged, with revised hourly rates in line with the Early Years National Funding Formula to accommodate the expanded two-year-old entitlement and new provision from nine months. The Local Council Tax Reduction Scheme will remain unchanged for 2024-25. The Cabinet also noted the overall Dedicated Schools Grant (DSG) deficit.