Tower Hamlets Mayor’s wasteful spending prompts Whitehall to order independent inspection (again!!)

From Cllr Marc Francis, Bow East, Labour

Two years ago, Lutfur Rahman made a bold promise to not to raise Council Tax if he was elected as Mayor of Tower Hamlets.  In Labour’s camp people were incredulous.  In the wake of Lutfur Rahman’s removal from office in 2015, Labour’s Mayor, John Biggs had had to both raise Council Tax and make cuts to services to balance the books.  How could anyone serious promise to both increase spending and cut tax when Tower Hamlets Council, like most others was experiencing ballooning costs, especially with social care and homelessness?  I don’t think Council Tax was the main factor of John’s defeat, but I do think Lutfur Rahman’s promise had an impact on some people’s votes.

This time last year, in his first Budget, Mayor Rahman broke that promise – raising Council Tax by 2 per cent.  Labour councillors didn’t oppose that increase, as some of it was spent on services for residents, but we did oppose the use of £1.5 million of it on employing an additional 24 advisors and assistants in the Mayor’s own private Office.  We wanted that all money spent on improving services and providing extra support for those suffering at the sharp end of the desperate cost of living crisis.  Despite our efforts, Mayor Rahman’s Aspire Party councillors voted down our amendment and he got his extra political ‘advisors’ and spin doctors.

Fast forward another 12 months, and Mayor Rahman’s draft Budget published just before Christmas proposed another 2 per cent increase in Council Tax – a second broken promise.  Labour councillors were still deciding how we would respond to this when significant changes to the Budget were sneaked out on 24^th January.  These proposed not only a further 3 per cent increase in the year ahead (2024/25), but two more 5 per cent increases in the 2025/26 and 2026/27 for good measure.  When we dug into what that is due to be spent on, we discovered the Mayor wants to employ even more spin doctors and run a PR campaign at a cost of nearly £1 million more a year.  For those in the average Band D property that equates to more than £500 extra Council Tax being paid to fund Lutfur Rahman’s re-election operation.  

He claims only the rich will pay this increase.  It is true that the Borough’s Council Tax Support scheme exempts most of those on means-tested benefits.  But that was in place throughout Labour’s time in power.  It is also true that council officers have created an innovative new Council Tax Relief scheme, which the Mayor claims will mean that those earning up to £50,000 won’t pay the increase.  But that isn’t true.  Even if eligible, they will only not have to pay the extra 3 per cent.  They will still pay the original extra 2 per cent and the increases in 2025/26 and 2026/27 as well.  Worse still, eligibility is based on total household income, so families with grown-up children in work probably won’t get it.  Neither will those sharing privately-rented flats.  

Labour councillors will be opposing this unnecessary additional Council Tax hike at the Full Council meeting on Wednesday.  With food and energy costs, and much else besides so high, it is an absolute liberty for the Mayor and his councillors to demand even more of your money for these extravagant and self-indulgent purposes.  If we can’t stop it, we will try to ensure it is spent on services for local residents, especially those still suffering at the sharp end of the cost of living crisis.  Similarly, we will try to scale back his plans to increase council tenants’ rents by up to £26 a week too.

Last week, our view about this wasteful spending and the wider governance failings in the Town Hall has been endorsed by civil servants responsible for overseeing all local government.  On Thursday, we heard news that they have instructed a team of independent experts to carry out a best value inspection at Tower Hamlets Council.  Those with long memories will recall a very similar inspection was carried out when Lutfur Rahman was last Mayor of Tower Hamlets following allegations about the inappropriate payment of grants.  And in late-2014, the finding of that inspection resulted in the Government sending in independent Commissioners to control all spending and recruitment.  That was a moment of shame, which the Mayor and his councillors still haven’t apologised for.

We have been warning that Tower Hamlets Council is following the same terrible path as a decade ago for the past year.  Governance has deteriorated at a rate of knots since the departure of the Chief Executive appointed by the Commissioners in 2015 a year ago.  Opposition councillors’ efforts to scrutinise the Mayor’s policies and the performance of services are obstructed at every turn.  Other dedicated and effective senior staff have left as well.  An independent Peer Review carried out by the Local Government Association (LGA) last autumn noted that staff repeatedly described the Mayor’s Office as “a council within a council”.  Opposition councillors weren’t even told about the completely inadequate ‘action plan’ drawn-up in response to that criticism, let alone invited to contribute to it.  

You simply can’t run a £1.5 billion local authority this way in 21^st Century Britain.  Frontline services are now struggling as well.  Tower Hamlets Council is clearly on the slippery slope to another intervention from Whitehall.  There is a real risk that Commissioners will again be sent in to control spending and the appointment of senior staff.  I would hate that to happen.  But the only person who can stop it is Mayor Lutfur Rahman himself.  He must now change his ways – and quickly.  Wednesday’s Budget meeting is the moment for him to do that.  He should accept Labour’s amendment to spare residents this 15 per cent £517 Council Tax hike by getting rid of the coterie of political advisors, and dropping plans for more spin doctors and a PR campaign.   

The debate will be broadcast live on Tower Hamlets TV for those who want to see what he does.

Cllr Marc Francis, Bow East, Labour