The Government has announced it is monitoring Newham council amid concerns about the town hall’s finances, culture and the value it is providing for taxpayers.
The Ministry of Housing, Communities and Local Government (MHCLG) on Thursday issued a “Best Value Notice”, which means the local authority will be observed for the next 12 months to ensure it is improving.
Ministers are concerned that “significant value for money weaknesses” have been identified in the council as well as “cultural and governance issues”.
They also have “significant delivery concerns about some of the programmes delivered by the authority”, particularly housing.
Last year Newham was handed the worst rating ever issued by the Government regulator for the state of its social housing amid warnings tenants were being put at “unacceptable risk”.
In a letter to the council’s chief executive Abi Gbago, Deputy Director of Local Government Stewardship James Blythe said: “Given the seriousness of the issues identified, failure to deliver the level of change required at sufficient pace would be very concerning.”
He added: “This notice will be reviewed after 12 months, at which point the department will confirm whether we deem it necessary to continue to seek assurance through such a notice, in which case it will remain in place. The notice may also be withdrawn or escalated at any point based on the available evidence.”
It comes after Newham residents saw a 9% council tax hike last month - almost twice the amount allowed elsewhere in the country - when the town hall argued it would go bust without increased financial support.
The borough was forced to implement a raft of extreme cost cutting measures and requested emergency government funding as the cost of housing homeless families pushes it to the brink of bankruptcy.
The authority applied for Exceptional Financial Support from the Government after its spiralling temporary accomadation bill left it with an almost £160million budget gap.
Newham Mayor Rokhsana Fiaz insisted that the council has already made progress in addressing some of the Government’s concerns.
“But it is clear we still have a way to go,” she added.
“The council is already on a significant change and improvement journey to enable us to meet our statutory requirements, transform how we operate and deliver our Building a Fairer Newham Corporate Plan.
“We have already strengthened governance and processes as part of our Action Plan following the Corporate Peer Challenge we instigated in October 2023 with the Local Government Association (LGA).
“We are also currently finalising an action plan with the Regulator of Social Housing to improve our housing services, following the unacceptable C4 rating the Council received last year.
“To meet the exceptional financial pressures the council faces as a result of temporary accommodation and rising social care costs, which led to us requesting Exceptional Financial Support from government last year, we are making savings to the Council and transforming how we operate and deliver services.
“I am determined that the council rapidly responds to the Best Value Notice and demonstrates that it is well equipped to deliver for our residents as we accelerate our journey of improvement and change”.
