Havering Cabinet Approves Budget Amid Funding Crisis

Havering’s Cabinet recently gave the green light to the Council’s budget for the upcoming fiscal year, 2024/2025. This decision comes amidst a pressing funding crisis that has the potential to force the council into declaring bankruptcy if not addressed promptly.

It is important to remember that while the Cabinet has agreed on the budget, it is still open to scrutiny and must be agreed upon at Full Council.

The approved budget report highlights a staggering £32.5 million budget shortfall, which escalates to a daunting £81.9 million deficit over the next four years. This financial strain stems from a combination of factors, including an outdated funding formula that has failed to keep pace with the borough’s evolving population dynamics.

Years of underfunding from the government have exacerbated the situation, leaving the council grappling with significant financial challenges. Compounding the issue are rising living costs and a decrease in available housing, leading to a surge in homelessness and the associated costs of temporary accommodation.

To stave off the looming financial crisis, the council is urgently seeking government approval for a £54 million loan through the Capitalisation Directive. Without this crucial intervention, the council may be forced to trigger a Section 114 notice, effectively declaring bankruptcy.

Cllr. Christopher Wilkins, Haverings Cabinet Member for Finance, told the Havering Daily,

“In light of the pressing funding crisis and our staggering £32.5 million budget shortfall, Havering’s Cabinet has approved the budget for 2024/2025, marking one of the most difficult budget rounds in recent memory. Despite our prudent financial management, our challenges stem from underfunding in social care and homelessness, with the government only funding a mere 12% of our estimated pressures for next year.”

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