Council tax rise fear as Tower Hamlets mayor pleads to No 10 for help with £30m gap tackling Covid

Hints that your council tax or business rates could shoot up in the New Year have been given by Tower Hamlets Council following exclusive reports in the East London Advertiser.

The cost of dealing with Covid-19 has left a £30million financial black hole, the authority has acknowledged this week in a statement to the paper.

The town hall has had to spend £60m more than it budgeted for because of the Covid emergency, with the government only coughing up half that so far.

Now the mayor is urging Downing Street to “stick to its promise to do whatever it takes” to help out.

“We face increased costs and a reduction in income due to Covid-19,” John Biggs said. “This has put a heavy burden on public services and finances that will last for years to come.”

He welcomed the government’s pledge to “do whatever it takes” to meet urgent needs faced by the public, but warned: “The truth is that the financial support received so far falls well short of what we have already had to spend.”

It becomes bleaker still looking three years ahead. The council already agreed a long-term budget for 2020-23 back in February, just before the pandemic outbreak, which included £8.6m cuts.

But unforeseen gaps caused by the emergency means finding an extra £60m in the next four years.

Cabinet member Candida Ronald said: “There’s no doubt that Covid-19 has had a financial impact. But we have come together as a community. The council has stepped in with a £120,000 community fund to support people in the months ahead.”

Yet that is a drop in the ocean compared to the £30m gap caused by the pandemic, on top of £190m cuts over the past 10 years of government austerity budget payments to councils battling to save essential frontline services.

The effect in the East End has been children’s public nurseries and now even meals-on-wheels for the elderly being scrapped.

Major falls in collecting council tax, business rates, and money from fees and charges hasn’t helped, while demand for public services shoots up.

“Serious concern” has also been voiced over a “disproportionate impact of Covid-19” on ethnic communities which is currently being investigated by the council.

But the East End has also rallied, with a project helping rough sleepers off the streets during the pandemic and making it easier to get them help on health issues and tackling drug addiction with the highest estimates of crack and opiate use anywhere in London. The council is helping addicts make lasting changes in their lives — as long as the cash can be found.

Now public consultations are planned later in the year, which could mean council tax and business rate rises, as the mayor hinted in the Advertiser on July 29, because of the Covid emergency fast emptying reserves of cash the council has stashed in the bank.

The hunt for more revenue could inflate charges such as council tax, business rates, parking rates and parking permits, with a fresh budget set next March.