The Tower Hamlets Cabinet met on Wednesday, 31 January 2024, to discuss and approve the borough's budget for the upcoming financial year and the medium-term financial strategy. Key decisions included a 4.99% council tax increase, comprising a 2.99% general increase and a 2% adult social care precept, with measures to protect lower-income households. The Cabinet also approved significant capital investments, including over 2,000 new electric vehicle charging points and the regeneration of the Harriott, Apsley, and Pattison Houses estate, which will deliver 407 new homes, including 180 affordable units.

The meeting also addressed the council's financial strategy, approving a £459.429 million General Fund Revenue Funding Requirement for 2024-25 and a Housing Revenue Account (HRA) budget that includes rent increases. Numerous savings proposals were discussed and approved, aiming to generate income and improve efficiency across various services, including a review of contracts, IT infrastructure, and staffing structures. Additionally, the Cabinet agreed to a three-year licence to occupy for areas of Victoria Park with AEG Presents Limited to host major events, and approved the Corporate Equalities Plan for 2024-26.

Council Tax Increase and Budget Approval

The Cabinet approved a proposal to increase council tax by 4.99% for the financial year 2024-25. This increase is comprised of a 2.99% rise for general council tax and an additional 2% adult social care precept. Councillor Saied Ahmed, Cabinet Member for Resources and the Cost of Living, stated that this budget aims to safeguard low-income and vulnerable households from the worst effects of the cost of living crisis. Households earning less than £49,500 will not be impacted by the 2.99% council tax rise, with approximately 28,000 households exempt and a further 19,000 households not paying any increase. For those earning above this threshold, the average increase will be 66p per week.

The council's budget for 2024-25 and the Medium Term Financial Strategy (MTFS) for 2024-27 were approved. The budget aims to achieve a sustainable, balanced position, reducing the previously budgeted use of reserves by £19 million over the MTFS period. This is considered a significant achievement given the economic challenges faced by councils nationwide. The net service costs over the next three financial years are projected to be over £1.38 billion, which is nearly £30 million more than the total current funding allocation. The budget includes investment in essential growth areas such as temporary housing, support for children with special educational needs, and adult social care.

Housing Revenue Account (HRA) Strategy and Fees

The Cabinet approved the Housing Revenue Account (HRA) Strategy for 2024-27 and proposed changes to HRA fees and charges for 2024-25. These changes are consistent with the approach taken for general fund fees and charges. The HRA strategy includes accounting changes related to minimum revenue provision and borrowing ratios, which create additional headroom for investment in safety improvements for existing homes and the potential to deliver up to 600 new homes. The strategy also aims to reduce reliance on bed and breakfast accommodation for temporary housing by up to 200 people.

Capital Programme Investments

Significant capital investments were approved, including:

• Institute of Academic Excellence (IAE): £15 million allocated to establish a selective A-Level institution to improve attainment and support students' access to top universities.
• Culturally Sensitive Substance Misuse Treatment Centre: £1.51 million allocated for a specialist recovery service for problematic substance users from BAME communities, offering culturally sensitive support.
• Women's Resource Centre: £1 million allocated to establish a dedicated centre, with a focus on Bangladeshi women, to provide development opportunities and address economic, health, social, and gender inequalities.
• Basic Need Programme: £11.128 million for the expansion of Beatrice Tate Special School and Hermitage, and the development of Alternative Resource Provisions (ARPs).
• Universal Free School Meals (UFSM): £0.792 million capital investment to ensure secondary schools have the necessary equipment to deliver universal free school meals.
• Parks Programme: £4.988 million investment in parks and open spaces, including upgrades to sports facilities, inclusive playgrounds, and environmental improvements.
• Highways and Transportation: £4.227 million for public realm improvements across seven key sites, including parking bays, electric vehicle charging points, pedestrian crossings, and environmental enhancements.
• Rubbish and Recycling Bins: £1.485 million investment in additional bins to support housing development growth.
• Care Technology Transformation: £0.3 million investment to expand care technology provision, aiming to support more residents to live independently and improve health and wellbeing.
• Idea Stores IT Hardware: £0.3 million allocated for new IT hardware for Idea Stores.
• Carbon Offset Programme: Funding allocated for tree planting, solar PV installations, residential energy efficiency measures, and grants for community groups.
• Electric Vehicle (EV) Charging Points: Approval sought to procure over 2,000 new EV charging points across the borough, funded by suppliers. This includes 35 rapid chargers and 2,000 slow chargers, with a joint procurement with Barking and Dagenham for an additional 200 fast and 30 rapid chargers.

Regeneration and Development

• Harriott, Apsley & Pattison (HAP) Houses Regeneration Scheme: Cabinet approved the appropriation of land for planning purposes to facilitate the regeneration of the HAP Houses site. This scheme will deliver approximately 407 new homes, including around 180 affordable units, and a new community centre and mosque. Cabinet also agreed in principle to pursue compulsory purchase powers to acquire any outstanding interests in the land.
• Victoria Park Licence to Occupy: A three-year licence to occupy was approved for areas of Victoria Park for AEG Presents Limited to host major and community events in 2024, 2025, and 2026. This is expected to generate additional income for park maintenance and provide more cultural event opportunities.

Savings and Income Generation Proposals

A significant number of savings and income generation proposals were discussed and approved, aiming to achieve the council's savings targets. These include:

• IT Infrastructure Rationalisation: Savings of £180,000 over three years by reducing IT infrastructure contracts.
• Commercialisation of Enforcement and CCTV: Proposals to generate income from enhanced enforcement activity and commercial offers for CCTV monitoring, aiming for a cost-neutral service in the long term.
• Highways Maintenance Funding Change: Shifting highways maintenance revenue works to be funded from the parking reserve, generating £468,000 in savings.
• Electric Vehicle (EV) Charging Points: Income generation through supplier-funded installations, with revenue share and site fees payable to the council.
• Resume MOT Service: Aiming to generate £25,000 annually by offering MOT services internally.
• Special Treatment Licence Fees: Increasing business licence fees for special treatment establishments, projected to generate £23,500 in 2024-25.
• In-sourcing of Out-of-Hours Environmental Health Response: Transferring the service to the Community Safety Service, with estimated savings of £185,000.
• Service Restructures: Several service restructures were approved across directorates, including in Children's Services, Highways and Transportation, Environmental Health and Trading Standards, aiming to improve efficiency and reduce management costs. These include the deletion of managerial posts and the redesign of roles.
• Leisure Service Insourcing: Project costs of £525,000 in 2024-25 are anticipated as part of the insourcing of leisure services, with further savings projected in subsequent years.
• Increase in Leisure Service Income: Proposals to increase income from membership, events, spa services, swimming, and other activities, projected to generate £966,824 in 2025-26 and £1,036,160 in 2026-27.
• Council Tax Empty Property Premium: Introduction of a premium for properties empty for over one year, projected to generate £500,000 annually.
• Council Tax Second Home Premium: Introduction of a premium for second homes, projected to generate £2 million annually from 2025-26.
• Council Tax Arrears Collection: Investment in additional resources to target council tax arrears and closed account debt, aiming for a net income generation of £173,000.
• Business Support Savings: Savings of £965,000 through service restructuring and efficiency measures within business support functions.
• HR IT Systems Duplication: Savings of £119,000 by terminating redundant IT contracts.
• Finance Contingency Budget Removal: Removal of a £200,000 contingency budget from the Chief Financial Officer's team.
• Insurance Fund Smoothing: A proposal to reduce the insurance fund balance by £200,000 annually, based on actuarial reviews.
• Capital Financing and Investment Income: Increased interest income from capital reserves is projected to generate £1.75 million over three years.
• Fees and Charges Increases: Annual increases to fees and charges are proposed, reflecting RPI indexation, projected to generate £830,000 over three years.

Other Matters

• Corporate Equalities Plan 2024-26: The Cabinet agreed the Corporate Equalities Plan, which sets out the council's actions to achieve equality objectives, promote diversity, and ensure the workforce reflects the community.
• HAP Regeneration Scheme: Cabinet approved the appropriation of land for planning purposes and agreed in principle to pursue compulsory purchase powers to facilitate the regeneration of the Harriott, Apsley, and Pattison Houses site. This scheme aims to deliver new homes and community facilities.

The meeting also noted the Overview and Scrutiny Committee's review of the budget proposals and cost of living crisis support.