Tower Hamlets Council's Cabinet has approved the budget for the 2026-27 financial year, alongside the Medium-Term Financial Strategy (MTFS) for 2026-29. The decision was made amidst significant financial pressures facing local government nationally, including rising service demands and constrained resources.
The approved budget outlines a net General Fund requirement of £482.151 million for 2026-27. This includes an additional £15 million allocated to temporary accommodation and £22.5 million for Adult Social Care growth. The Housing Revenue Account (HRA) will see a significant capital investment of £100 million over the next five years in existing housing stock, bringing the total planned investment to £318 million. A £400,000 hardship fund for tenants is also being introduced to mitigate the impact of rent increases.
To address financial pressures, the council plans to implement new savings and efficiencies totalling £6.4 million in 2026-27. These will be supported by £25 million in strategic funding substitutions and £10 million in transformation-driven reductions.
The council's reserve strategy has been revised to include an annual increase of £20 million to the risk reserve, an increase in contingency by £15 million over the MTFS period, maintaining the General Fund reserve at a minimum of £25 million, and establishing a Transformation Reserve of £5 million annually.
Council Tax is set to increase by 2% for Adult Social Care and 2.99% for the general element. The Council Tax Reduction Scheme remains unchanged, offering up to 100% support for residents on the lowest incomes.
