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Tower Hamlets faces £2m deficit as it prepares its budget

PUBLISHED: 19:10 10 February 2010 | UPDATED: 15:35 05 October 2010

TOWN Hall bosses are thrashing out their budget proposals this-evening in London’s deprived East End in the face of a £2 million deficit looming. Tower Hamlets councillors are being told that budgets in most departments are being badly managed

By Mike Brooke

TOWN Hall bosses are thrashing out their budget proposals this-evening (Wednesday) in London’s deprived East End in the face of a £2 million deficit looming.

Cabinet members at Tower Hamlets have been told that budgets in most council departments are being badly managed.

This means the authority’s General Revenue fund is likely to go into the red by £2,044,000 in its day-to-day accounting by the end of April.

Government subsidies are being cut, so the authority needs to bring in a cool £310m in the coming financial year just to make ends meet.

That would put the average Band D council tax at £885 from April 1 if tonight’s recommendations are agreed, which would still have to go before the full council later.

The cabinet is being asked to establish a “balanced and robust budget” for 2010-11. The economic downturn has slowed the East End’s regeneration, the cabinet is being told. That puts pressure on Town Hall income.

The Chancellor’s pre-Budge report in December confirms “Government funding for public services is poor.” The outlook apart from NHS spending and front line’ schools looks particularly serious.

The current £2m overspend’ will have to come out of next year’s budget, the cabinet is warned. “The overspend is a matter of concern,” council finance experts are telling members. “It reflects that budgets are not being successfully managed in five out of six council directorates.”

The deficit would have been higher, around £3.7m, but some cash has been clawed back’ by last year’s lower-than-expected local government pay award to council workers.

The council’s chief finance officer warned in December that the authority faced going into the red by £8m, with a projected overspend up to £4m in housing budget alone.


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