Budget Published: Two Days Before Christmas.
Unable to find a rerun of The Great Escape on any of the 233 TV channels available to us and being a group of saddos, we’ve been pouring over the budget during this Christmas period.
Early indications are that the Labour government has chosen to bail out, not just another failing Labour council, but the council which squandered £58m of useable reserves, ran the authority into debt requiring not one, but two government bail-outs and increased council tax by over 50%. Such is the Fiaz legacy.
Announcing a “Breakthrough Budget” we learn that this year, council tax rises will be limited to 4.99%, the legal maximum. Wouldn’t it have been welcome news to discover a zero increase in council tax? It would also have been good electoral politics!
But alas, it was not to be. That would have required a major change in the mindset of the current mayor.
We learned that Newham is coming out of the “exceptional financial support” mechanism, meaning that they won’t need to go cap-in-hand the Whitehall next year for a bail out.
“Mayor Rokhsana Fiaz OBE said: “Our draft Budget plan for next year is game-changing””. Cabinet Member for Finance, Councillor Zulfiqar Ali, said: "This is a breakthrough budget for Newham.” At least two people are happy. On the money our taxes pay them, they should be.
And how did our leaders secure this game-changing, breakthrough after seven years? A simple answer might be that they have now got a competent chief exec, but that’s not the whole story.
It could be that they have begun to get control of their costs, and with the new chief exec, and the embryonic new senior team it appears that they are getting a handle on this.
The real reason is found in the draft budget. Newham no longer needs to go cap in hand to Whitehall is because the settlement for 2025-26, i.e. the amount of direct grant from government is somewhat more generous than it has been in previous years.
“The Provisional Local Government Finance Settlement announced on 17 December 2025 represents a significant step towards rectifying years of systematic underfunding that has affected real people in our community every single day.” A “decade of Injustice” has been redressed!
Ignore the spin. Newham has never had the same levels of funding as inner London. What this means is, effectively they have got a bail-out at the beginning of the year rather than at the end.
We learn that “(t)he 2026/27 allocations announced in December 2025 are £44m more and 13% higher than the 2025/26 baseline”. Over three years this is projected to bring the deficit down from £115m to zero.
Good that Newham is getting more money. Good that they are projected to be rid of the debt. But it does rather hide the question of why Newham was solvent and efficient at one time and then became a basket case.
It also saves the political embarrassment of having to go to Whitehall for yet another bail-out just before the local elections. Thank goodness that there is a Labour government in power, or at least in office.
It is clear that whoever replaces Fiaz in the top job, and the favourite has to be Forhad Hussain, there will still be work to do. Projected savings on paper are not the same as actual savings in practice. We have seen little evidence of Fiaz’s pet programmes being systematically evaluated. The new mayor will have some breathing room, but rest assured, there is still much left to do. Before embarking on any new programmes, the new mayor will need to focus on rebuilding financial stability.