Council Budget blackhole grows to £71m as Mayor continues spending spree


Tower Hamlets Council’s medium term financial plan is showing an £80m gap in funding by 2016/17 following a combination of Government cuts and the independent Mayor’s unsusuatinable spending. Until this point the Mayor will be relying on the Council’s reserves to cover the gap but from 2016/17 these will be depleated to their lowest advisable level still leaving a £71m gap to be filled.

The disasterous state of the Council’s finances were revealed only weeks after the Mayor was forced to scrap a 149 council home Watts Grove housing scheme due to financial mismangement.

Writing in the finance update report the Council’s Chief Finance officer states that based on the current Mayor’s approach:

“The level of savings required to be achieved for the period 2015/16 through to 2016/17 are likely to be in the region of £71m, and the spending reductions are anticipated to continue into 2017/18.”

Labour have been warning for over a year that the Mayor’s out of control spending was unsustainable and plunging the Council into even deeper financial difficulty. At the Council’s budget meeting in February Labour councillors proposed a number of savings which would have cut back on waste and removed over £1m from the Council’s oversized communications budget. The Mayor however used his executive powers to block the savings, instead passing a budget which saw the social work staffing budget cut by 5%.

In the last month and a half alone the Mayor has announced £1.5m of new spending and grant funding. This comes on top of a £296,000 budget for mayoral advisors and thousands spent each month on a luxuary Mayoral Mercedes. Labour argue that the Council’s financial situation could be greatly improved with a responsible Mayor focused on getting the best value for money from council services. They point to the recent admission by the Mayor that whilst hundred of bins were reported uncollected virtually no action was taken against contractors.

Labour’s Spokesperson for Finance, Cllr Carlo Gibbs, said:

“First the Council is hit by deep and destructive budget cuts by the Tory Government and now we see how the Mayor’s out of control spending is making the situation much worse.

“The Mayor is always keen to trumpet his big spending projects but a £71m blackhole is nothing to shout about. Residents want a Council which can provide the services they need but also balance the books.”

Labour’s Candidate for Mayor of Tower Hamelts, John Biggs, said:

“Obviously the current Mayor’s out of control spending  spree isn’t sustainable. Any incoming administration will face serious financial challenges but with a responsible and competent team we will be able to prioritise frontline services and protect local people from the worst excesses of the Tory cuts.

“Instead of frantically trying to buy the next election with local peoples’ own money the Mayor should be focused on policies which protect our community in the long term.”

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