A London borough has proposed a raft of extreme cost cutting measures and requested emergency government funding as its homelessness bill pushes it to the brink of bankruptcy.
Newham council is planning to stop financing Christmas and Eid lights to save £200,000. It has also suggested removing free tea and coffee for staff in its offices and banning internal catering, such as biscuits, for meetings in a desperate bid to save cash.
All of the council’s fees and charges, excluding parking and commercial rents, are expected to increase by 20 per cent. A Council Tax Reduction Scheme, which sees poorer residents face lower payments, could be scaled back as the town hall attempts to find £20.3million of immediate savings at a meeting next week.
Other measures include beginning a consultation on giving up its swanky Dockside offices opposite London City Airport and selling off other property assets, such as the Debden House conference centre in Essex.
Newham is also proposing it stop maintaining its bowling greens to save £24,000-a-year and cut its fitness schemes for the elderly.
Documents, due to be discussed on Tuesday, reveal the council is in "discussions" with the Ministry of Housing, Communities and Local Government (MHCLG) for emergency funding “in light of the temporary accommodation challenge facing Newham".
It does not say how much it has requested from central government but is predicting a budget gap of £175million over the next three years. Some £100million of this would be down to spiralling temporary accommodation costs due to increasing rents and homelessness in the borough, the council said.
Newham is supporting around 6,500 families in temporary accommodation and has more than 38,000 households on its social housing waiting list.
In the 12 months to April it saw 6,685 homelessness applications — up 26 per cent on the previous year. This year alone it anticipates it will overspend by £47million, of which £31million is for housing homeless families and £16million for social care costs.
Councillor Zulfiqar Ali, cabinet member for finance and 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.”
So far 19 local authorities have requested assistance from the government’s EFS scheme, and it is expected many more will follow this year and next.
Earlier this year cash-strapped Havering was granted a last-minute £54million government loan to prevent it plummeting into bankruptcy.
In a cost-cutting budget the town hall agreed to dim street lighting on main roads, explore alternative bin collections and review children’s centres and libraries.
Newham Mayor Rokhsana Fiaz 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 per cent 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.”
