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Respect’s answer to the Council’s funding crisis

March 12, 2010

This is the unabridged version of a letter that appears in this week’s East London Advertiser

To the editor,

There can be no doubt that local government spending is going to face a massive attack over the next few years. Professor Tony Travers, the expert on local government, estimates cutbacks of up to 20% are likely as central government tries to reduce the massive deficit brought on by the collapse of the financial sector. Council officers are projecting an £18 million council deficit next year, again the year after and even worse in 2014.

The council is legally obliged to balance its budget. Council tax, which only accounts for 15% of council revenue, is likely to be capped at a low rate of increase and is fiercely regressive and unfair anyway.

Therefore, massive cutbacks are in prospect.

Respect has a five point programme to address the impending crisis in our local authority finances.

Firstly, we urgently need a reform to the council tax system. The cap should be lifted on tax on properties worth more than a million pounds to make the tax fairer and to allow more funds to be raised from it and the system of local taxation needs to be changed to make it more closely related to ability to pay.

Secondly, control over the business rate needs to be returned to local government so that the banks in Canary Wharf make a much larger contribution to the welfare of Tower Hamlets residents.

These two measures will allow much more money to be raised locally.

Thirdly, the council needs to be able to borrow to invest, particularly in the vital area of housing which is going to be hit very badly by central government cutbacks.

Fourthly, central government needs to urgently introduce a Robin Hood tax to tax large financial transactions in order to cut the government deficit instead of cutting spending. This could raise billions to plug the hole in central government’s finances.

And lastly, we need to have a council pro-active in encouraging foreign direct investment into projects of social benefit to the people of Tower Hamlets.

Unless we take radical measures to raise revenue, there will be mass redundancies and services that are vital, particularly to the less well-off in Tower Hamlets, will be slashed over the next few years.

Councillor Abjol Miah, Respect Group leader
Town Hall
Mulberry Place
5 Clove Crescent
London E14 2BG

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One Comment leave one →
  1. Fan permalink
    April 14, 2010 3:21 am

    I would like to know what Rashanara Ali has to say about these topics, she is very quite on issus. why is she so invisible in the local area, why are her ppl trying to sneak her into power on the Labour ticket???

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