Newham residents won’t now endure another nine per cent council tax hike in 2026 – but a number of fees and charges will still be going up, and some cuts remain necessary.
The threat of an 8.99 per cent council tax rise – which would have been the second in a row – was included in early budget proposals published last October.
However, last month Newham Council learned it would be benefiting from the government’s Fair Funding Review, making such a rise unnecessary. It now plans a 4.99 per cent rise instead, which has been the standard increase for most London boroughs in recent years.
Writing in newly-published draft budget plans, senior Labour councillor Zulfiqar Ali - responsible for finance at Newham Town Hall - said the lower increase would still “be difficult for many households already facing cost of living pressures, and this decision has not been taken lightly”.
However, he said the increase would make “a necessary contribution to maintaining services”.
Cllr Ali added: “Even with this increase, Newham will continue to have the lowest council tax in outer London and remain well below the London average.”
The cabinet member for finance had warned in October that the council faced “difficult decisions” to plug a predicted £53million funding gap and balance its budget next year.
Council leaders had previously been considering asking the government for permission to raise council tax above the 4.99 per cent cap.
They were also considering making cuts and “savings” in areas such as children’s centres, bin collections, social care, arts and culture and staff pay and conditions.
But changes to the way the government allocates funding to councils mean some of these proposals have been ditched.
The government’s new funding package for Newham is set to be £352.5m for 2026/27. The council says this is £30.8m more than it predicted in October based on how the government previously worked out its grant settlements.
The outcome of the Fair Funding Review, published shortly before Christmas, adjusted council funding based on up-to-date population data and ways of measuring deprivation that take greater account of housing costs.
Writing in the draft budget papers, Cllr Ali said the new formula “represents a significant step towards rectifying years of systematic underfunding that has affected real people in our community every single day”.
However, he said the council would still have to make “savings” of £23.5m over the next five years. That’s on top of the £51m it has already agreed and is still implementing.
Next year’s draft budget includes plans to raise £16.8m from a range of proposed measures, including closing at least one children’s centre site and merging children’s centres with family hubs, to save £1m.
The council is also considering cutting its council tax discounts to the poorest households, from 80 per cent to 70 per cent.
Other proposals include moving to fortnightly waste collections and increasing the prices of parking fees and permits.
The council’s separate housing revenue account budget, which is specifically for council housing, proposes a rent increase of 4.8 per cent next April.
