Council approves two financial improvement plans despite concerns over lack of scrutiny.

Local democracy reporter Sebastian Mann today writes:

Havering Council has approved two financial improvement plans, but some councillors are concerned they have not been properly scrutinised.

The schemes – an improvement and transformation plan, and a productivity plan – went before the cabinet 18th July.

After a £32.5million budget gap forced Havering to effectively declare bankruptcy in February, it was offered a bailout of £54m from the then Conservative government.

The conditions of the loan stipulated the council would need to produce an improvement and transformation plan by August, as well as cut “unnecessary” spending and eliminate any “superfluous” expenses.

It would need to be “rooted in clear deliverables” and “tangible, measurable outcomes,” former housing minister Simon Hoare said.

The plan outlines how the council will boost its services for residents, from bolstering its housing stock to reviewing how it handles formal complaints.

Havering will also look to open an “emergency welcome centre” for households facing homelessness, while implementing new software so social workers can handle referrals better.

Councils across the country have also been asked to produce productivity plans, which lay out their current operations and future plans. Havering’s includes the construction of 2,000 new homes by 2029 and setting up a debt recovery board for “high volume, high amount” debts.

Both plans were signed off by senior councillors, but concerns were raised that neither had been presented to a dedicated scrutiny committee.

Typically, documents and plans go before a committee of ten or so members, who examine their contents and flag any potential issues. After that, they will be presented to the cabinet, who will debate them further before voting to approve or reject them.

The plans will be presented to the overview and scrutiny board next Tuesday, six days after they have been approved.

Councillor Martin Goode told the leadership: “It is premature to ask us to approve [the plans] before we’ve looked at them.

“You’re putting the cart before the horse.”

Keith Prince, the leader of Havering Conservatives, warned issues could be uncovered further down the line and may not be properly addressed.

A spokesperson for the council told the Local Democracy Reporting Service (LDRS) the general election on 4th July meant the original meeting, pencilled in for 2nd July, had to be rescheduled.

They said: “The council always endeavours to allow for pre-scrutiny of strategic decisions, although it is not obliged to do so.

“In this case, due to the short turnaround required for submission of the reports and the fact that a number of meetings had to be moved due to the surprise general election, there was no time to allow for pre-scrutiny ahead of cabinet.”

Cllr Goode was also critical of the plans not detailing how the loan would be repaid, but council leader Ray Morgon said it had not been asked for.

He said: “The plan is just that – the plan. It doesn’t go into the detailed financial side of it as that’s not what’s been asked for.”

Kathy Freeman, Havering’s chief financial officer, added: “It was down to us to determine what we put in the plan.

“We thought we would take the opportunity to put to the fore that our financial position isn’t one of our own making.”

On the opening page of both plans, the council describes itself as a “cost-effective” council that had been injured by 14 years of “systemic underfunding”.

It has maintained this argument since accepting the loan five months ago, with Cllr Morgon telling the LDRS the incoming Labour government “needs to make sure our needs are met”.

Local authorities are required by law to provide a series of services, including social care, housing, children’s services and, in some cases, education.

Their funding per person has fallen by an average of 26% since 2010, according to the Institute for Fiscal Studies.

The loan will not be handed over in one lump sum, but will act similarly to a line of credit the council can draw from if it so needs, at a fixed interest rate.

Councillors will be notified whenever the authority borrows money, Cllr Morgon said.

Now the plans have been approved, they will be submitted to the Ministry of Housing, Communities and Local Government (previously the Department of Leveling Up, Housing and Communities).

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