Council Tax Collection Failure Revealed
Newham Council has failed to collect nearly £31 million in council tax since 2018, with officials admitting they took their "eye off the ball" following the pandemic. The shocking revelation comes as the east London borough faces a £53 million budget shortfall and considers severe service cuts alongside a potential 8.99% council tax increase.
Worst Collection Record in London
According to figures presented to councillors, £30,840,577 of council tax remains unpaid from the period between 2018 and 2024. The council's collection rate for the 2024/25 financial year was just 89.9% - the lowest among all London boroughs and significantly below the London average of 94.9%.
Interim chief executive Paul Martin told an overview and scrutiny committee meeting that Newham had consistently recorded the second-worst collection rate in London for the four financial years preceding 2024/25. While acknowledging that all councils faced collection challenges during COVID-19, Martin criticised the authority's lack of "rigour" in recovery efforts.
"Every council is impacted by that, Newham is no different to any other council," Martin stated. "It is clear that in our recovery immediately after Covid it looks to me from the data here that we took our eye off the ball."
Service Cuts and Resident Frustration
The collection failure comes at a critical time, with the council attempting to balance its budget through controversial measures including:
- Reducing weekly waste collections
- Closing or merging youth zones and children's centres
- Requesting government permission for an 8.99% council tax increase
Labour councillor Carleene Lee-Phakoe emphasised the direct impact on services, stating: "Council tax is used to provide services – services that our residents need, services that our residents want and for some residents that they rely on. The reality is we don't have enough money to pay for services."
The council's recent drive to improve collection through letters and text messages has shown some success, with officers projecting a 94% collection rate by March - close to pre-pandemic levels. However, this recovery effort has overwhelmed the council's call centre, leaving frustrated residents unable to get through.
Mehmood Mirza of the Newham Independents group reported that residents were turning to councillors for help because they "can't get through on the telephone, the emails aren't replying." Labour's Susan Masters added that some councillors had been assisting "residents who were told they had arrears wrongly."
Dave Gibbs, head of revenues and transactional finance, acknowledged the unprecedented call volumes but said the council had to act when they recognised their collection rate "wasn't great." He confirmed that call volumes have since decreased and residents should now find it easier to contact the council.
