Havering Council has responded to the findings of the CIPFA External Assurance Review, which was commissioned to assess the Council's financial position and governance arrangements.
The review, conducted by the Chartered Institute of Public Finance and Accountancy (CIPFA), and published on the MHCLG government website, concludes that the Council’s financial management arrangements are working effectively and confirms the Council’s decision making process is sound.
The report provides a comprehensive analysis of the Council's financial management, sustainability, capital programme, governance, and service delivery.
Key findings
- Despite cumulative savings since 2018-19 of £79.3 million, the Council faces a projected budget gap of £70 million for 2025-26, necessitating further government support.
- The Council's financial pressures are primarily driven by increased demand in Adults and Children's Social Care, homelessness, and home to school transport.
- The review confirmed that the Council's request for Exceptional Financial Support (EFS) amounting to £53.7 million was warranted to cover an overspend of £21.2 million in 2023-24 and a budget gap of £32.5 million in 2024-25.
- The review found no deficiencies in the Council's financial management arrangements, although it recommended formalising these through a review against the CIPFA financial management code.
- The Council's ambitious house building programme and capital projects were noted, with recommendations to review and potentially defer elements to reduce revenue costs.
- Governance arrangements were found to be robust, with good relations between members and officers.
Leader of Havering Council, Councillor Ray Morgon, commented on the review, stating:
"We have said all along that we are not in this position because of poor financial management, bad decisions or irresponsible investments.
"This CIPFA review only goes further to confirm that. The report once again highlights the severe financial pressures faced by the Council.
"The rapidly increasing costs in social care and homelessness, coupled with years of reduced funding from the government, have forced us to seek another government loan.
"We will continue to lobby for change in how we are funded to accurately reflect our rapidly changing population and needs, and we remain committed to delivering high-quality services to our residents and will continue to work diligently to address these financial challenges."
The Council will next undertake a formal review against the CIPFA financial management code and increase investment in preventive services to mitigate future demand pressures.
Additionally, the Council will engage in dialogue with the government to secure future funding and ensure the sustainability of its services.