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Council workers in Tower Hamlets are being warned to brace themselves for job cuts.

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Tower Hamlets chief executive Kevan Collins wrote to all council employees today about cuts explaining they are needed to cope “with the unpredecented financial challenge” facing the country.

The council is believed to be looking at cutting 500 jobs as it saves £70 million from its budget.

Mr Collins has said that around 500 jobs will need to be axed in 2011/2012 and he has asked managers to draw up restructuring plans.

He said the staff budget has to be cut by 23 per cent to save £29 million.

Mayor Lutfur Rahman has asked department heads to present their budget suggestions to next month’s cabinet meeting.

The mayor and chief executive will be holding a series of roadshows for staff to explain what is happening and the council is consulting with the unions.

Mr Collins told staff: “It is with regret that I am writing to inform you that today I have written to the trade unions outlining the potential impact on jobs of the government’s cuts. Our approach to this unprecedented financial challenge is to try to minimise the impact on staff and the community in Tower Hamlets. We will do our utmost to minimise job losses and redundancies by reducing spend on agency staff and deleting vacant posts.”

Conservative leader on the council Peter Golds: “I find it absolutely ridiculous that at a time staff are hearing this job adverts are going out for the head of the mayor’s office at between £57,000 and £59,000.”

Poplar and Limehouse Labour MP Jim Fitzpatrick said: “The coalition are cutting too deeply too quickly and we could end up with the situation Ireland is in.”

He added: “We will be working to defend front line services as best as we can. In Tower Hamlets it is clear that things are going to be difficult for many people.”

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