Lutfur’s �300m Tower Hamlets budget passed—with Labour’s help

The Labour opposition group on Tower Hamlets council last night found itself in alliance with the controversial independent Mayor Lutfur Rahman to get his �300 million budget passed.

The mayor accepted seven Labour amendments contained in their alternative proposals.

His move was in the face of the Conservative-led Government’s spending cuts which was forcing �100 million savings on Tower Hamlets over the next three years.

It was also a slap in the face for the Tory opposition group on the council when he rejected their alternative budget proposals out of hand.

“We’re all facing very difficult times,” the Mayor told the packed meeting.

“No leader before me has faced what I am having to—�100 million of devastating cuts that no local authority leader should have to face.”

He turned to Labour group leader Joshua Peck and told him: “I am happy to accept some Labour recommendations as amendments to my budget.”

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These include cuts in redevelopment, council promotional advertising, taxis for councillors and staff, back office services and the Olympics ambassador.

Money saved would make way for Labour’s proposals to give pensioners a �50 rebate on their annual council tax, giving bonuses to the council’s low-paid staff, restoring funding to the Docklands Festival, keeping the victims’ support programme going and finding �50,000 for a full-time counsel for a project helping women victims of serious crime in the East End.

But the Mayor stopped short of Labour’s hopes of cutting funds for “cosmetics” such as more tree planting, or using ‘planning gain’ money for internships.

Then he turned to Tory Opposition group leader Peter Golds and said firmly: “No—I don’t accept any of your amendments!” This brought cheers from the public gallery.

It was now a ‘Rahman-Labour’ budget which would never have been contemplated a year ago.

Labour was still reeling from its 2010 defeat at the local polls to elect Tower Hamlets’ first executive mayor, when Rahman ran against the party that had just deselected him—and won.

They vowed not to cooperate with the new mayor who was now in charge of the �1 billion annual turnover and had kept to it—until last night when he adopted many of their proposals.

Critics see it as Lutfur’s path back into Labour, following the pattern of Ken Livingstone’s return after winning the London Mayor election as an independent in 2000 when he, too, had been blocked as candidate.

But Labour group leader Joshua Peck denied afterwards “cosying up” to Mayor Rahman. Labour had abstained from the final vote, he pointed out—but that was enough to get the amended budget through for 2012-13.

Tories pointed out that the new budget would cost council taxpayers an extra �450,000—widening a fiscal black hole stretching to �762,000, as the council’s own finance officer pointed out.

Council tax only brings in 12 per cent of the �300 million spending—the rest coming from Whitehall.

The turnover altogether is �1.2 billion a year, which includes government-funded education, social welfare and housing benefit.