A Newham councillor has told City News that “it’s perilous times for the council and a perilous time for residents” after council tax was increased by nearly 10%.
The authority has defended its decision, after getting special permission to exceed the 5% limit set by the government.
But it has sparked frustration among residents.
Why is Newham’s council tax going up?
Newham’s Labour councillor, James Beckles, told City News that the local authority has to make £157 million-worth of savings.
He explained that temporary accommodation is the biggest strain on its budget.
Newham currently has more than 6,500 residents in temporary accommodation.
The borough’s mayor Rokhsana Fiaz says the decision to significantly increase council tax hasn’t been taken lightly:
We know that this is a difficult time for many of our residents…we will continue to support those most in need through our proposed 80% Council Tax Reduction Scheme.
Rokhsana Fiaz, Mayor of Newham
A housing estate in Newham
How does Newham’s situation compare to other boroughs?
It is one of six councils across England, Scotland and Wales that has been given the green light to raise Council Tax above the 5% cap.
Despite being one of London’s most deprived boroughs, Newham residents will pay more than some of the wealthiest areas in the capital.
Data for Band D properties for next year shows:
· Newham: £1,366
· Kensington & Chelsea £1,111
Some councils have yet to confirm what their rates will be from April.
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Is this a sustainable fix?
Professor Tony Travers, a local government expert from the London School of Economics, told City News that Newham’s situation is particularly challenging, given its rising population and high demand for cheap homes and temporary accommodation.
Being allowed to increase Council Tax above the cap will raise money, but it won’t solve the underlying problem. The growth in population, housing demand, and other essential services means that financial pressures will persist. This is a temporary fix, not a long-term solution.
Professor Tony Travers, local government expert at the London School of Economics
Professor Travers said that selling land and other assets, such as Birmingham and Thurrock councils, is not a simple solution to a local authority’s financial pressures.
Professor Travers said the biggest issue Newham faces is raising money for day-to day spending for social care for the elderly, sweeping the streets and temporary accommodation.
“It’s a huge expense that can’t be raised from borrowing”, he explained.
“There are other things they could do like putting up parking charges, increasing social care fees, but none of these options are ideal.”
Will other councils follow Newham?
Professor Travers told City News that the Government faces the risk of more councils now seeking approval to increase their council tax above the cap.
However, he noted that next year’s London borough elections may make further increases less likely.
“Historically, councils try to keep council tax low in election years”, he said.
“So while some boroughs may follow Newham this year, we might see fewer increases in 2025 as councils look to maintain voter support.”
It calls for greater transparency and accountability around the management of the public funds, accusing leaders of “wasteful spending”.
Councillor, James Beckles told City News that the council’s political decisions can “always be better” but that it “has got a huge challenge at hand with a highly dependent population relying on their services.”
Low-income residents – 80% of the lowest-income households will still pay no council tax at all under the scheme.
Students – Full-time students are exempt from paying council tax.
People on disability benefits – Those receiving Disability Living Allowance (DLA) or Personal Independence Payment (PIP) may qualify for reductions.
Single occupants – Residents who live alone receive a 25% discount.
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HeadlineNewham councillor warns of ‘perilous situation for council and residents’ after 10% council tax rise
Short HeadlineNewham councillor: residents face 'perilous situation' after 10% council tax rise
StandfirstResidents will see their bills rise by almost twice the limit normally allowed.
A Newham councillor has told City News that “it’s perilous times for the council and a perilous time for residents” after council tax was increased by nearly 10%.
The authority has defended its decision, after getting special permission to exceed the 5% limit set by the government.
But it has sparked frustration among residents.
Why is Newham’s council tax going up?
Newham’s Labour councillor, James Beckles, told City News that the local authority has to make £157 million-worth of savings.
He explained that temporary accommodation is the biggest strain on its budget.
Newham currently has more than 6,500 residents in temporary accommodation.
The borough’s mayor Rokhsana Fiaz says the decision to significantly increase council tax hasn’t been taken lightly:
We know that this is a difficult time for many of our residents…we will continue to support those most in need through our proposed 80% Council Tax Reduction Scheme.
Rokhsana Fiaz, Mayor of Newham
A housing estate in Newham
How does Newham’s situation compare to other boroughs?
It is one of six councils across England, Scotland and Wales that has been given the green light to raise Council Tax above the 5% cap.
Despite being one of London’s most deprived boroughs, Newham residents will pay more than some of the wealthiest areas in the capital.
Data for Band D properties for next year shows:
· Newham: £1,366
· Kensington & Chelsea £1,111
Some councils have yet to confirm what their rates will be from April.
Show more
Is this a sustainable fix?
Professor Tony Travers, a local government expert from the London School of Economics, told City News that Newham’s situation is particularly challenging, given its rising population and high demand for cheap homes and temporary accommodation.
Being allowed to increase Council Tax above the cap will raise money, but it won’t solve the underlying problem. The growth in population, housing demand, and other essential services means that financial pressures will persist. This is a temporary fix, not a long-term solution.
Professor Tony Travers, local government expert at the London School of Economics
Professor Travers said that selling land and other assets, such as Birmingham and Thurrock councils, is not a simple solution to a local authority’s financial pressures.
Professor Travers said the biggest issue Newham faces is raising money for day-to day spending for social care for the elderly, sweeping the streets and temporary accommodation.
“It’s a huge expense that can’t be raised from borrowing”, he explained.
“There are other things they could do like putting up parking charges, increasing social care fees, but none of these options are ideal.”
Will other councils follow Newham?
Professor Travers told City News that the Government faces the risk of more councils now seeking approval to increase their council tax above the cap.
However, he noted that next year’s London borough elections may make further increases less likely.
“Historically, councils try to keep council tax low in election years”, he said.
“So while some boroughs may follow Newham this year, we might see fewer increases in 2025 as councils look to maintain voter support.”
It calls for greater transparency and accountability around the management of the public funds, accusing leaders of “wasteful spending”.
Councillor, James Beckles told City News that the council’s political decisions can “always be better” but that it “has got a huge challenge at hand with a highly dependent population relying on their services.”
