Cabinet Members Pass Havering Council Budget Proposals For 2025/26.

Havering Council’s Cabinet has passed the Council’s budget proposals for next year (2025/26).

Once again it has been another tough year where the Council has seen continued increased costs from delivering social care and homelessness services.

Despite seeking further savings and efficiencies, as well as receiving a slight increase from the Government through the recent finance settlement, the Council is now seeing a gap in its budget of over £70 million. This includes carrying over £34 million pressures from last year.

Cabinet also approved a proposed increase of 4.99 per cent in council tax in line with the referendum limit and 2.7 per cent in fees and charges. It follows a consultation with residents, where 600 responded, 55 per cent said that they would pay 5 per cent or more in council tax, with 41 per cent saying they would not want to see an increase.

In addition, Cabinet agreed a rent increase of 2.7 per cent for council tenants, which is significantly less than last year’s rent increase.

The Leader of Havering Council, Councillor Ray Morgon, said:

“For a second year in a row – we have now approved a budget amidst a deepening financial crisis. I have been clear from the beginning that without urgent action from the Government, we would not have the money we need to bridge the gap from last year.

“Astronomical costs for social care and temporary accommodation, coupled with year-on-year of chronic underfunding from successive governments have left us in a dire position.  

“Despite constant lobbying and meetings with government ministers and civil servants, we are yet to see any meaningful increase in government funding. The costs from ongoing pressures have continued to climb which has led to a worse scenario with over a £70 million budget gap.

“We are taking many steps in an effort to close this gap, which include radical new solutions to reduce homelessness and the cost for hotels and temporary accommodation, exploring the use of AI to reduce costs, and working with local NHS partners to reduce the cost of care homes by getting residents back to their own homes from hospital as soon as possible.”

Cabinet also approved plans for a slight increase in rent for Council tenants, alongside some decreases in service costs and a commitment to deliver £18 million of improvements to Council homes.

In addition, the Council will continue to invest in safety with a new CCTV system coming online and another year of funding for the section 92 police officers.

Parks will continue to be maintained and the Council will carry on building homes for Havering residents through a number of different regeneration schemes.

The Council will also continue to invest in our roads, support local businesses through a new campaign, and ensure help remains for our most vulnerable through the cost of living challenge.  

The Leader continued: 

“However, it’s important residents understand the Council will not grind to a halt over our financial challenges. Services will continue for residents despite the budget gap. Staff and bills will still be paid. 

“To do this, last year we had to agree a Government loan (Capitalisation Directive) of £32.5 million pounds. This year, to ensure we once again have a balanced budget, we will have no choice but to apply for another Government loan of at least £70 million.

“It is either this, or a massive increase in council tax beyond the standard 4.99 per cent. And I’m not prepared to force Havering residents to foot the bill for the Government’s failure to act and properly fund us for the many services that we have to provide by law. 

“We will keep fighting for the borough and continue lobbying the Government for a common sense solution to the current funding crisis that both provides enough money to meet demand nationally but also is allocated based on current need, not on an outdated funding formula that takes no account of our changing population and needs. I urge all residents to sign our online petition to government and help get our voice heard.”

Following Cabinet approval, the budget will next be considered for agreement at the Council Tax Council meeting on Wednesday 26 February.

Residents can sign the Budget Petition at: www.havering.gov.uk/budgetpetition

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