Newham Council is considering a council tax increase of 9.99% for the 2025-26 financial year, citing severe financial challenges. The proposal, part of the draft budget approved by the Cabinet, includes a request to the Ministry of Housing, Communities and Local Government (MHCLG) for exceptional financial support (EFS) to enable the disposal of assets to raise capital receipts which can be used to bridge the gap. The council is also proposing to increase council tax by 9.99% as part of the EFS application.
The proposed hike aims to address the rising costs of temporary accommodation and other statutory services, which, according to Councillor Zulfiqar Ali, Cabinet Member for Finance and Resources, are beyond the council's current capacity to manage. He attributed the financial strain to the disastrous Tory mismanagement of the economy and the new Labour government’s cuts to public services.
Without the pressure of temporary accommodation costs, Councillor Amar Virdee, Cabinet Member for Housing, stated that the council would be in surplus.
If approved, the council tax increase would be accompanied by a Council Tax Reduction Relief Scheme set at 80% to protect vulnerable households. Currently, 18,000 households benefit from the existing scheme. Councillor Ali explained that the council tax increase was based on Newham’s relatively low council tax, which is currently the sixth lowest in London.
 for all London boroughs, excluding the City of London. Newham is highlighted in red.
Conrad Hall, Corporate Director of Resources and Section 151 Officer, cautioned that the proposed financial strategy is not sustainable in the long term. For the avoidance of doubt I would highlight paragraph 15.27, I’ll read it out because it’s very short, but this is not a sustainable strategy.
He also stated that if the EFS application were not approved, he would be in a position of being compelled to issue a section 114 notice. He also clarified that issuing a section 114 notice does not mean that the council can then choose not meet its housing duties social care duties and the many other statutory obligations.
The council has already identified £79.5 million in savings across various services, detailed in appendices A, B and C. The council considered other services but decided not to take those at this point in time because those were mostly universal environmental services type which are critical in terms of keeping our borough nice and clean and environmentally friendly.
The Mayor of Newham, Rokhsana Fiaz OBE, emphasized that the council has taken hard decisions to protect residents from the impact of Conservative economic policies. She confirmed that the budget proposals will be further developed in consultation with residents before final decisions are made by Full Council in February 2025.
The proposed council tax increase and budget measures were discussed at a Cabinet meeting on Thursday 01 January 2026.