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Mayor Lutfur Rahman proposes 4.99% council tax increase for Tower Hamlets residents in 2025

Tower Hamlets has proposed a council tax increase of 4.99% breaking a manifesto pledge to freeze rates for the second year running.

For the second year running, Mayor Lutfur Rahman’s proposed budget for the upcoming financial year includes a 4.99% increase in council tax.

As per last year, the increase includes a 2% Adult Social Care precept, a ring-fenced charge which can only be used for adult social care services. 

The council agreed on the terms of the proposed budget at a meeting on 8 January 2025. 

In Rahman’s 2022 manifesto, he pledged to ‘freeze council tax for four years, to protect the poorest from rising living costs’ yet last year he increased council tax by 4.99% and this year has proposed the same increase. In 2023, he increased it only by the 2% Social Care Precept. In total, this is an increase of about 12% since 2022. 

The Local Council Tax Reduction Scheme (LCTRS), a household means-tested scheme, will continue for eligible residents in 2025/6. The scheme offers up to 100% discounts for low-income residents which is not set to change under the new budget.

The Council said: “Our manifesto pledged to freeze Council Tax specifically to ‘protect the poorest from rising living costs’. That is precisely what we are delivering by freezing Council Tax for households with an annual income of less than £50,350, in line with our manifesto pledge, and we have gone even further by ensuring that those on the lowest incomes pay no Council Tax at all.”

An additional Council Tax Cost of Living Relief Fund, established as part of the 2024/25 budget will also continue for 2025/26. The qualifying household income will be raised to £50,350. 

On 13 December 2024, the Council told The Slice that ‘110 Cost of Living Relief Fund Grants have been made to date,’ with the processing of applications ongoing. 

Aspire Councillor Saied Ahmed, Cabinet Member for Resources and the Cost of Living, said that the Council has succeeded in producing a sustainable budget that is balanced across the medium term for the next three years. 

The final approval of the 2025/6 budget and Medium Term Financial Strategy 2025-8 will happen at the Budget Setting meeting on 26 February 2024.

New applications for the Council Tax Reduction Scheme can be made online via the Tower Hamlets Council website using this link: https://www.towerhamlets.gov.uk/lgnl/advice_and_benefits/benefits/council_tax_benefit/local_council_tax_reduction_sc.aspx

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