The Overview and Scrutiny Committee met to discuss changes to Tower Hamlets' draft budget for 2024-25. The meeting focussed on a proposed increase in council tax of 2.99% and the mitigation measures being put in place to help residents through the cost of living crisis. The committee also considered previously discussed changes, such as an increase to housing rents of 7.7%, and support for the Somali community through the provision of a dedicated community hub and the funding of the Women's Resource Centre.

Council Tax Increase

The most significant change to the budget was the proposed increase in council tax by an additional 2.99% on top of the 2% adult social care precept. The committee sought clarification on why this increase had not been shared with them until very recently and how the administration intended to ensure that vulnerable residents were protected from the effects of this and other increases to the cost of living.

In response to concerns that the lateness of the announcement about the proposed increase had prevented it from being included in the recent budget consultation, the Cabinet Member for Resources and the Cost of Living, Councillor Syed Ahmed, said > as we know, in setting a budget in any sort of environment, especially in a council, it's a huge object, it's constantly moving, constantly rolling, and the budget that we received in cabinet, and also that went into ONS at the first iteration, it was the first iteration, and from that point onwards, we are continuously working on the budget and we are also receiving advice from our section 151¹ and the finance team.

The Corporate Director of Resources, Julie Lorraine, added > What didn't change enough was the government's announcement on its funding proposals for local authorities...additional funding didn't happen, when that additional funding didn't happen those pressures around those areas, such as temporary accommodation, weren't going to go away.

In response to concerns that the proposed council tax relief scheme would not adequately protect vulnerable residents, Cllr Ahmed said that the council had a responsibility to ensure the sustainability of the budget and that the council tax increase would help to achieve this. He added that the relief scheme would protect those on low incomes and that other support was available for those who needed it.

Several members expressed reservations about the council tax increase and how the burden of increases to council tax, housing rent and other expenses would affect residents during the cost of living crisis. Councillor Asma Islam said > I am actually very disappointed to hear that there is going to be an increase in council tax, purely because as a resident I feel you're given with one hand and then taken with the other hand.

Somali Community Hub

The committee discussed a proposal to provide a dedicated community hub for the Somali community at the Granby Hall in Bow. Cllr Islam questioned whether the proposed funding of £60,000 would be sufficient to support the hub, to which Cllr Ahmed replied that this was a significant investment and that the council would continue to assess the needs of the community and provide additional funding as required.

Women's Resource Centre

The committee also discussed the Women's Resource Centre, which is due to open in Whitechapel in 2024. Cllr Islam questioned the long-term sustainability of the centre and sought clarity on how it would be funded. The committee heard that the centre would receive £400,000 per year for the next three years to cover running costs and staffing.

Increase to Housing Rents

The committee also discussed the previously agreed increase to housing rents of 7.7%, which had been the subject of much debate at the previous meeting. Cllr Marc Francis urged the council to introduce a cap on rent increases so that no resident would have to pay more than an additional £10 per week. He said:

I think that the 7.7% increase in Council rents for people that are living in an affordable rent property is ultimately unaffordable...So I really powerfully would encourage us all to make a recommendation about capping that increase at some kind of version of a flat rate.

Cllr Islam went further than Cllr Francis in her opposition to the rent increase and recommended that the council should not increase rents at all this year. She said:

This year with the council tax going up and everything else going up...I would like us to recommend that that 7.7% rent increase does not happen, please.

Mayor's Office Restructure

The committee considered a proposed restructure of the Mayor's Office which would save the council £327,000. Cllr Islam asked for more detail on where these savings would be made and expressed concern that the restructure was simply a way of hiding budget increases.

In response, Ms Lorraine said > those savings that are included are not new...All that's happened on this occasion is some more clarity has gone in and we're able to say that of that 1.8 million, 325,000 has now been specifically identified as arising as a result of planned structural changes that are still subject to consultation in the mayor's office.

She added that the restructure would see a number of staff, including the Mayor's caseworkers, redeployed to the Customer Services team.

The meeting concluded with the chair thanking members for their contributions and confirming that a final report reflecting the committee's discussions would be submitted to the Mayor and Cabinet.