‘We cannot sustain this position any longer, there have been years of systematic underfunding’-Havering stares bankruptcy in the face.

‘We are overwhelmed with the demands. We have many new families coming from inner London to outer London and we cannot keep up with their needs. The money we are receiving is just not enough’-Councillor Ray Morgon.

At a pre-budget meeting yesterday, 31 January Havering’s Leader of the Council, Councillor Ray Morgon and Chief Finance Officer Kathy Freeman spoke openly and clearly about the poor state of Havering’s finances and how the only option left for the borough is to apply for a capitalisation loan from the government. If this is not granted, then the borough will have to submit a 114 notice where it declares itself bankrupt.

Councillor Ray Morgon said: “Last week we went to meet the government Minister to ask for the loan. He was aware of our situation and acknowledged that we are a well run council and that we haven’t had the correct funding.”The formula the funding is based on is figures from 2011 and is completely incorrect. We have seen a massive increase in the arrivals of new families coming into Havering. People are moving from inner London to outer London.

“The money we are receiving just is not enough. Demands are increasing and we are completely over whelmed.

“We know we are making very unpopular decisions but we literally have no choice. Last year after the consultation results, we made adjustments. This year we have had a record number of people respond to the consultations with over 4,000. We will make adjustments this year as well.

Councillor Morgon has stated clearly that there have been no easy choices to make and that they are working with the community.

Councillor Morgon went on to say that council tax will rise again by 4.99%.

The borough’s finance officer Kathy Freeman said: “We cannot sustain this position any longer. It’s not that we haven’t tried but there have been years of systematic underfunding. It is with a very heavy heart that I say this but we have no other option but to ask for the capitalisation loan as we have no alternative, and even then its short term solution.

“We need £65 million and so far we are on track to receive 5 million and then 2 million from the extra government funding. That is a big shortfall.”

Havering Council will now wait and see if they have been granted the loan by the government.

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