‘I’m no ‘Joe Stalin’ says Tower Hamlets mayor who may have to raise your council tax after Covid
PUBLISHED: 07:00 30 July 2020 | UPDATED: 09:59 30 July 2020
Huge council tax rises could be on the way because the Covid emergency is fast emptying Tower Hamlets reserves of cash that’s stashed in the bank.
The town hall has been dipping into its reserve pot estimated at £170million two years ago to pay its way out of the pandemic crisis.
But now householders could be faced with a council tax rise next year of almost four per cent — any more would need a public referendum.
The deficit next year is predicted at almost £32m because of an “unprecedented drop” in the authority’s revenues, last night’s council cabinet meeting heard.
Mayor John Biggs warned about losing revenue from a record number of households without incomes asking for their council tax to be waived, among other municipal revenue losses, when questioned three days before at Monday’s scrutiny committee.
That would mean cuts in public services to fill the gap.
“Most people aren’t elected to make cuts to services,” the mayor said.
“I’m no ‘Joe Stalin’ — but we need to stabilise our budget in the next few months, otherwise we’ll be the tail wagged by the dog rather than us being in control. That will betray the people.”
Gaps have opened up with a £13m shortfall after an emergency £19m government bail-out. The forecast is a £26m loss for 2022-23 on top of the cuts that would have already been made.
“It’s going to be very painful over the next year,” Mayor Biggs added. “Our reserves are going down really, really rapidly. There’ll be no more in three years’ time to bail out if we carry on as we are.”
There were also other revenue losses like parking fees — and ironically motoring fines from traffic cameras, with Tower Hamlets being the sixth wealthiest London local authority from such income.
More details emerged at last night’s council cabinet meeting where Cllr Candida Ronald presented three emergency reports on how Covid has hit public service funding.
“Covid is a real game changer,” she said. “We are losing £30m in collecting council tax. I don’t know if we’re in for a long recession.”
The mayor aims to join other local authorities in lobbying the government to fill the gap.
The town hall is propping up its emergency cash with almost £12m syphoned from its Right to Buy income that has built up over the past three years before they have to be sent to the Exchequer as unused revenue from selling off council housing.
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