East London council to spend £13m more this year on temporary accommodation as housing crisis bites

Spending plans approved at Newham Council mark a “turning point” for the borough, Labour Mayor Rokhsana Fiaz has said, though the authority is grappling with huge pressures including its temporary accommodation costs.

During a debate last week, however, opponents from the Newham Independents group branded the council’s budget “austerity by another name”.

On Thursday (February 26) councillors debated and voted on the council’s budget for the coming financial year, from April, with plans to spend a total of £520.9million on services over the next twelve months. Some of the biggest areas of spending come where rising demand for statutory services have put councils across the country under financial strain.

Budget plans show the council expects to spend £140.9m on adult social care and health, and another £132.2m on children’s and young people’s services.

Spending on temporary accommodation for homeless families is planned to increase by £12.8m.

SIGN MyLondon’s petition to the UK Government calling for an end to councils making people homeless for refusing long distance housing moves.

The council plans to top up its general fund reserve – its pot of money set aside to cover unplanned overspends – to 10% of its annual budget each year. It will also set up a £10m “contingency” fund for unexpected costs.

It comes after changes to the way the government allocates funding to local authorities, with Newham Town Hall receiving £30m more in April than previously expected.

The increase means the town hall hasn’t need to apply to the government for ‘exceptional financial support’, as it has done previously. Mayor Fiaz told the budget-setting meeting last Thursday that the spending plans marked “a turning point” and represented “resilience and stability”.

She said the budget was “written in the language of Labour values – values of fairness, social justice and our collective responsibility to one another”.

She said: “We are investing in a future of hope – our promises kept to protecting the heart of Newham, our people.”

However, the budget also includes £55.7m of “savings” next year – with a total of £89.8m over the next three years. This includes saving nearly £1.6m by reducing council tax discounts for the borough’s poorest households.

Mehmood Mirza, leader of the opposition Newham Independents group, said the budget represented “austerity by another name”.

Cllr Mirza said: “Families are already dealing with high rents, rising bills and constant pressure just to get by. At a time when residents need stability and support this budget offers cuts, added strain. It weakens the very services that protect the most vulnerable people.”

Cllr Mirza also claimed his group had not been able to present an alternative budget because they had been “denied the time and full access to information” to do so.

He and the three other Newham Independents councillors then walked out of the meeting before the vote on the budget was taken.

Green group leader Areeq Chowdhury said: “Under this budget it is clear the most vulnerable will suffer again with a major cut to the council tax reduction scheme.”

He added: “We need a budget that is genuinely anti-austerity.”

The budget was approved, with Labour councillors voting in favour and the three Green councillors voting against. Newham Independents did not vote as they had left the meeting.