• Budget gap of £175m predicted over three years, with £100m caused by temporary accommodation costs rising in Newham because of homelessness.
• Mayor Rokhsana Fiaz and Cabinet working hard to protect vital services as part of building a fairer Newham budget challenge.
• Series of public engagement events start so local residents and partners can find out more.
The Mayor of Newham and Cabinet will be recommending a package of £20.3m immediate savings or income raising measures next week for the forthcoming financial year and begin consultation on proposals for a further savings totalling £70m, as part of plans to close a forecast budget gap caused by growing temporary accommodation and social care costs over the next three years.
The paper to be discussed at a meeting of the Cabinet on October 15th outlines the scale of the homelessness crisis facing Newham with a package savings options as part of plans to protect key services that matter to residents including road repairs, refuse collection, street cleaning. Adult services and programmes that support children and young people, alongside those that support people into skills and jobs have been prioritised as part of the Council’s plans to build a fairer Newham for those that need help most.
The Council has been transparent about its funding gap arising from increased demand and the spiralling costs of meeting statutory obligations such as providing temporary accommodation (TA) demand. The report to Cabinet highlights the anticipated overspend for the current financial year in the region of £47m, of which a forecast £31m is for TA and £16m for additional social care provision.
The report highlights that without taking action now, financial forecast show that the council could face an unprecedented budget gap of £100m in the 2025/26 financial year rising to £175m by the end of 2027/28, of which £100m would be directly attributable to temporary housing costs.
Savings and income raising proposals being suggested would close the gap by £70m over the next three years, roughly equivalent to the cost of pressures other than those caused by the housing crisis, for which the council is applying to central government for exceptional financial support.
Councillor Zulfiqar Ali, Cabinet Member for Finance & Resources said: “No one will deny that the choices we are going to have to make are difficult. For Newham, this will not be because we have failed in our financial management approach; rather past government policy and the inefficacies of the housing market in London and the UK has failed us. We have already asked the government for Exceptional Financial Support and are waiting for the outcome.”
Earlier this week, engagement on the budget plans began with an online event for residents hosted by Newham Mayor Rokhsana Fiaz OBE on Monday (Oct 7), and will continue throughout October and November, with a draft 2025/26 budget report coming to Cabinet by early January.
Mayor Rokhsana Fiaz OBE said: “We have pledged to be open and honest about the issues facing us, and we are working hard to identify all savings We are a well-managed, financially responsible council but the additional costs of a 26% rise in demand for temporary housing are the difference between us being able to balance our budget both last year and this. Most London boroughs have now published information which shows they face exactly the same issues as we do. But we still have to take steps to do all we can to mitigate the situation now – and this is the start of the process.”
Within the proposals are savings that will be implemented immediately once approved by the Mayor and by Cabinet, with others starting from the New Year. These include an increase of 20% on all fees and charges, except those relating to resident parking, where the council has discretion to charge; such as registration and celebration charges, building and facilities hire and penalty charges for things like littering or graffiti and building control fees. These will generate an extra £4m - £5m in extra income to the Council as part of plans to protect vital services.
A series of ‘invest to save’ proposals looking to receive the green light from Cabinet for an immediate start include Adult and Children’s Social care proposals such as create specialist foster carers with increased training and allowances to care for some children currently needing high cost residential care; and a multi-disciplinary team to work intensively with children who are at most risk of exploitation, serious youth violence or with high level mental health needs-diverting them from residential care or return them home from care with support.
The Council is also seeking to make £20m savings through a major transformation programme currently underway looking at improving resident experience by enhancing our website, automating processes and improving technology. As part of the programme the council aims to co-locate more services together in the borough so that residents can access what they need from one place and increase preventative services such as programmes to reduce homelessness.
It is also set to put forward measures which if accepted by Cabinet will go on for wider consultation such as reviewing the level of Council Tax Reduction Support so that they are more in line with neighbouring boroughs, reviewing its library provision, consolidating its Children’s Centres into fewer locations, and making savings in the way that it’s Our Newham services that provide financial advice and employment support are delivered. Proposals also include reviewing the way the Council’s People Powered Places programme is delivered.
The report also seeks approval for the Council to begin consultation on leaving its Dockside Office and dispersing staff to other buildings across the borough; selling other property assets currently outside Newham; and looking at environmental measures the Council wants to pursue involving commercial and business parking charges and permits.
Engagement events on the proposal began with an online resident event hosted by Mayor Rokhsana Fiaz on Monday 7th October to outline the budget situation, and will be followed by further detailed engagement events throughout October and November both in person and online, with a draft Budget plan for the 2025/26 financial year published in the New Year.
Read the full Cabinet report here and find out more about Newham’s budget and how to take part in online or face to face consultation events across the borough throughout October and early November on www.newham.gov.uk/wevegotthis.
