Tower Hamlets Town Hall in Whitechapel. Photo credit: Rich Mix, London
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Tower Hamlets Mayor announces 4.99% increase in council tax

Mayor Lutfur Rahman has announced a 4.99% increase in council tax for some Tower Hamlets households after promising in his 2022 manifesto to freeze rates for four years.

Some Tower Hamlets households will face a 4.99% increase in their council tax bills from April 2024 after Mayor Lutfur Rahman announced his updated proposed budget for 2024-25.

As part of the 4.99% increase, 2% will go towards adult social care, while 2.99% will go towards general spending at Tower Hamlets Council and raise an additional income of £3.277 million.

The decision comes after Rahman’s 2022 manifesto pledge to ‘freeze council tax for four years, to protect the poorest from rising living costs’.

In February 2023, Rahman maintained this promise at a time when 23 out of 33 London councils raised bills by 4.99%. In Tower Hamlets, bills rose by just 2% to cover adult social care, one of the lowest increases in London.

In April 2024, council tax in Tower Hamlets will rise by 4.99%, the maximum increase allowed without seeking permission through a referendum. Explaining the decision, the council reported uncertain public sector funding from the government and investment requirements ‘in the things of most importance to residents’. 

At a cabinet meeting on Wednesday 31 January, Sirajul Islam, Labour party councillor and leader of the opposition at Tower Hamlets Council, said: ‘In the budget report, general council tax is being proposed to be set at 2.99%, with the additional 2% precept. In total, a council tax rise of 4.99% during the cost of living crisis.’

In response, Councillor Saied Ahmed, Cabinet Member for Resources and the Cost of Living, said: ‘This budget enables us as a council to continue safeguarding low-income and vulnerable households from the worst affects of the cost of living crisis.

‘Due to our rigorous budgeting process, we are able to protect average and lower earners from the 2.99% rise in council tax, whereby households with an income less than £49,500 will not be impacted at all.’

The 19,000 households whose income falls below the threshold will be eligible for a Council Tax Cost of Living Relief Fund, protecting them from the 2.99% increase. Meanwhile, households with an income above £49,500 will see their council tax increase by an average of 66 pence per week.

The 28,000 households in the borough who were already exempt from council tax payments will also be protected from the 2.99% increase. 

Mayor Rahman said: ‘What are we trying to do? We are taxing the rich, those who are earning more than £49,500. The rich people, to help those who are unfortunate.

‘The rich, and those who can afford, should pay more than those who can’t afford. This is what we’re trying to do. We’re trying to turn around a regressive tax, tax which hits the poor more than the rich, and turn it into a progressive tax.’ 

Responding to the news, Andrew Wood, former Conservative counsellor for Canary Wharf said: ‘The Mayor has very ambitious spending plans, making commitments that no other local authority in the UK can afford to make. But they all need to be paid for. He promised in his election manifesto not to increase Council tax at all but circumstances have forced him this year to increase Council tax by the maximum rate allowed.

‘The 2% adult social care precept is another name for Council tax, all Council tax is paid into the same pot but adult social care is one of the main costs the Council has to pay for.’

Mayor Rahman distinguished the 2.99% increase in council tax from the 2% adult social care precept, saying ‘the precept, adult social care, we have to do that, we have no choice, that’s 2%, don’t conflate the both of them’.

In response to the announcement, Labour councillor Marc Francis said: ‘It is shocking to see Mayor Lutfur Rahman again going back on his promise to freeze council tax if he was elected. He already raised it 2 per cent last year and will now raise it 5 per cent from April. Worse still, it seems set to rise by a further 6 per cent in the next two years as well.

‘And to add insult to injury, a large part of the money raised will be used to subsidise his extravagant and self-indulgent private Mayor’s Office of advisors and spin doctors.

‘Labour councillors will do everything we can to challenge this unnecessary council tax hike and the way much of the money raised is being used to serve the Mayor himself instead of the people of Tower Hamlets.’

The 2024-25 budget report will be presented to the full council on Wednesday 28 February.

For more local politics, read our interview with Mayor Lutfur Rahman.

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2 thoughts on “Tower Hamlets Mayor announces 4.99% increase in council tax

  • Maybe if the mayor hadn’t ransacked the borough contingency fund to retrospectively pay for his election promises or spend £5mil on new offices for himself, then we wouldn’t need to be selling off more event dates in Vicky park or raising council tax?

    Reply
  • In what world is a household income of £49k “rich”?! That’s a couple both earning less than 25 grand, who could barely afford to rent a one bed in the cheaper parts of Tower Hamlets. Guarantee the mayor is living on WAY more than that and doesn’t consider himself a “rich” person.

    Reply

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