Havering Council has launched its budget consultation for 2025/2026 – in the face of continued significant financial challenges.
Next year the authority is predicting a budget gap of around £74million.
This leaves the Council with few options to address the deficit.
- Another Capitalisation Direction (government loan)
- Significantly increasing Council Tax beyond the Government’s proposals (this would require a referendum).
- Section 114 (effectively declaring the Council bankrupt with the possibility of Government Commissioners being sent in to run the Council which in itself would incur significant costs).
- Urgent intervention from the government (extra funding/funding formula review to reflect current population change and need).
The consultation asks for views from residents to help shape the difficult decisions that need to be made and to ensure that money is directed to where residents want it to go, once we have delivered all of the services that we must provide by law.
Councillor Ray Morgon, Leader of Havering Council, said:
“The Council still remains on a financial cliff edge. We have done all that we can to stop this from happening and independent analysis has shown Havering to be one of the most cost-efficient Councils in the country.
"Over the past 10 years, we have made around £160million in savings and continue to work on finding further cost savings and income generation opportunities.
"But because we are already a low-cost Council, future savings are even more difficult to find.
“As I have said repeatedly, this crisis is a result of years of drastic cuts to the funding that Central Government provides to us, together with a significant spike in those that are homeless and in need of housing, coupled with unprecedented demand for both adults’ and children’s social care.
"This means we are once again in a position where we cannot be certain of being able to put forward a balanced budget, which we have to do by law.
“We have the second oldest population in London, together with the fourth fastest growing young population in the country.
"This has resulted in huge pressure and demand on social care for both adults and children meaning that over 70 percent of the Council’s budget is spent on delivering social care, which we legally must provide – and that figure is steadily rising.
“In 2010, the Council received £70million of Revenue Support Grant from Central Government which is now just under £2million today.
"It’s no wonder that we are in such a difficult financial position.
"The Revenue Support Grant coupled with other funding such as business rates makes up the Council’s core grant known as the Settlement Funding Assessment.
"This has been reduced from £100million to £40million over the same period.
"Despite the borough’s fast-changing population, Havering’s core grant remains one of the lowest in London.
“The new Government has pledged additional funding for local authorities which is welcome news and has also signalled a long-awaited review of the funding formula.
"This is all positive, but it will only help us if future funding allocation accurately reflects Havering’s changing population and needs.
“These reforms will also take time to introduce and until they are delivered, we will not be able to balance our budget without further external support or another Capitalisation Direction (loan) from the Government.
"Regrettably, this position is likely to continue until Havering receives the right level of funding to deliver the services, we must provide by law, together with other services much valued by residents.
“Havering continues to lobby government for meaningful change and rest assured we are doing everything we can to cut costs and identify efficiencies in order to close the budget gap.
“I urge all residents to have their say in our consultation and to help us fight for a fairer deal by signing our petition and writing to their local MP.”
Have your say on our 2025/26 budget
The consultation is open until Friday 3 January 2025. Residents can take part in the budget consultation online.
Alternatively, paper copies of the consultation will be available at local libraries.
A public meeting will also be held at Havering Town Hall, Romford on Wednesday 18 December, 7pm to 9pm. Full booking details are available on the consultation webpage.
Residents can sign the budget petition and write to their local MP using the information on our website.
Sign the petition and write to your local MP
Residents are encouraged to sign up to the Council’s weekly Living in Havering email newsletter for updates on the budget and other council and community news and events.