Why does Havering get short changed? Our borough still receives a lot less financially than other London boroughs.

Councillor Graham Williamson Cabinet lead for Development and Regeneration today writes in the Havering Daily on how Havering is still being short changed compared many other boroughs.

We reported in our previous articles that the Government’s (Rate Support) grant to Havering had been cut from £70m in 2010 up to only £1.5m this year. This dramatic shrinkage of support was the result of the Government’s austerity program. The Government reduced support to all Council’s but most Councils, for example, in London still received much more than Havering. Why is this?

BIASED FORMULAS
In the 1980’s, the Government of the day (ironically Conservative as now) introduced a complicated and opaque formula to calculate a split of  their grant to London Councils. It was designed to give more to inner-London boroughs rather than outer. Such formulas had the advantage of achieving such a redistribution without most of the public even realising how or why (no doubt fearful of their supporter’s reaction otherwise). It had a further benefit that all calls for more monies for outer-boroughs fell on deaf ears. The Government argued that, however unfair, any extra monies for Havering would have to be at the expense of inner-London boroughs and the latter would have to agree! Some older residents may remember the ‘Justice for Havering’ campaign of the ’90’s. Every year a Council Leader would go to Whitehall to plead with a Minister and every year they would return empty handed. 

DISCRIMINATION
The financial result was striking. In 1993, in response to a question from Robin Squire (Hornchurch) MP, the Government provided a list of the Grant per head given over the period 1980 to 1993. On average Havering residents received an average of £225.69/person. Neighbouring East London Councils however received significantly more e.g., Barking and Dagenham £265.69, Newham £518.08, and Tower Hamlets 558.93. (graph attached).
Thus, Havering has been discriminated against for many years with no prospect of change.   

CONSEQUENCES
Every year a Council has to balance its books i.e., whatever it wants to spend in a forthcoming year is fully funded. The ‘gap’ is usually plugged by increasing Council Tax or sometimes dipping into its shrinking and now meagre reserves. 
Firstly, Havering’s poor annual grant has meant that for most years our Council tax has had to be increased so that ours is the 4th highest in London (and wealthy Westminster is half ours!).
Secondly, our General Reserves have barely increased over the years but now have come under serious pressure and stand at only £11m. Other boroughs are healthier given their higher grant(s). For example, Waltham Forest has £15m, Tower Hamlets £24m, and Brent £32m (Westminster has £61m). If we include ‘earmarked’ reserves, Havering has the 3rd lowest reserves in London. (show graph)

LOOK AFTER OURSELVES?
Sadly, it looks as if we will remain at the bottom of Government support indefinitely so the Council will need to find other ways of raising monies. This is the greatest challenge for the new Administration.
Cllr Graham Williamson (South Hornchurch) Cabinet Lead for Development & Regeneration