Council passes Havering budget for 2024/25

Published: Thursday, 29 February 2024

Havering Council has approved the 2024/2025 budget, the most difficult in the Council’s history.

Havering Council has approved the 2024/2025 budget, the most difficult in the Council’s history, after the Government confirmed it was minded to grant an in-principle approval for the Council’s Capitalisation Direction.

At the annual Council Tax Setting Full Council meeting last night (Wednesday 28 February 2024), the draft budget for 2024/25 was passed with 27 to 20 votes (2 abstaining).  

The budget comes amid unprecedented financial challenges as the authority faces a £32.5 million budget gap, which rises to £81.9 million over the next four years due to increased pressures outside its control and a year-on-year reduction in Government funding.

This meant the Council was forced to apply for a £54 million loan (Capitalisation Direction) in order to produce a balanced budget and avoid a Section 114 notice, effectively declaring it unable to set a legally balanced budget for 2024/25.

The financial difficulties are down to a number of different factors.

Havering has the second oldest population in London together with one of the fastest growing young people populations in the country, which has seen an unprecedented demand for adult and children’s social care. 

This is coupled with the increase in the cost of living and a reduction in available Housing which has led to a significant rise in homelessness and temporary accommodation costs.

Government funding has also decreased over the years and the Council’s resources no longer meet the demands it faces.

For the next financial year there will be an increase to Council Tax by 2.99 percent with an additional 2 percent, as set by the Government for social care making the total proposed increase 4.99 percent.

This does not include the Mayor of London’s precept.

After the biggest-ever consultation with residents where almost 4,000 people responded, the budget also includes a number of proposals to make savings or increase income.

  • Generating income through increasing fees for registration services, parking, bulky waste and green waste collections.
  • Dimming lights by 30 percent on main roads and being more efficient on road schemes.
  • Increase market pitch fees and ending the Sunday market in Romford.
  • Reviewing preventative contracts and amending rent subsidies for the voluntary sector.
  • Increase events in parks and reduce the cost of Christmas lights and trees.
  • Launch a review of Children’s Centres and Libraries.

Following the consultation, the Council agreed the above changes including launching a separate consultation around individual library closures and alternative weekly waste collections.

In addition, the earlier proposal for charging in park car parks and Sunday parking charges have been scrapped.

Consultation feedback also resulted in the Council halving the proposed pay and display parking increase, as well as only raising the cost of football pitch fees by inflation.

Work will also take place to see if Christmas lights and trees can be funded by sponsorship from Town Centre businesses or other groups so that they still go up during the festive season.

Despite the difficult financial challenges the Council will still deliver statutory services and other services which matter most to residents, including:

  • £5.5million on maintaining and improving roads and pavements and street lighting 
  • continuing to fund the S92 police officers to help keep the borough safe 
  • regular rubbish and recycling collections, and street cleaning as part of our new contract with Urbaser
  • improving customer services and digital platforms for residents to access council services
  • investing in new affordable homes for residents through our regeneration programme
  • investing more in delivering vital social care services to adults and children 
  • maintaining 16 green flag parks
  • ensuring suppliers and other service providers continue to be paid and funded.

Council also approved spending plans for the next four-year Mid-term Financial Strategy (MTFS).

Councillor Ray Morgon, Leader of Havering Council, said: 

“We are seeing one of the most difficult times for local Government ever. Agreeing this budget has been a painful process for all concerned due to the tough financial position we find ourselves in.

“Year on year we have become more efficient, found savings and continued to deliver vital services to our residents.

“However, rising costs and pressures from social care with the second oldest population in London and fourth fastest growing children’s population in the UK, alongside an increase in homelessness numbers and inflation, mean we don’t have the money to meet the demand.

“A broken Government funding formula with year-on-year reductions without taking into account the rise in demand and costs have left us with no choice but to apply for a Capitalisation Direction.

"I am pleased that this has been agreed but it delays the inevitable for the next year when we may have to apply for another one. This is why there needs to be a fundamental change in how we are funded.

“Sadly it also means an increase in Council Tax for residents but we are doing all we can to try and mitigate the cost further.

“We did listen to residents when we ran the budget consultation and some unexpected windfalls from the Government, our leisure services contractor, and our waste collection contract meant we were able to reduce some of the pain and not make some of the proposed savings.

“My concern though is what happens next. We will continue to look at more efficiencies and lobby all political parties for sustainable local government.

"If this is not resolved, we will regrettably see further reductions to non-statutory services in the future and/or further loan requests.”