Cash-strapped Havering Council Could Fail To Make More Than £1million In Much-Needed Cuts This Year.

Recently published figures show the council will fall short of its agreed target of £10.25m by £1.65m, writes local democracy reporter Sebastian Mann.

They are entirely contained in the council’s ‘people’ directorate, which oversees adults’ social care, children’s services, public health, and housing.

Council finance officers have pointed to underfunding from the central government, which they say does not match the “pressures the council is facing”.

“It is nationally recognised that national funding for social care has fallen significantly behind the rising demand and costs local authorities are experiencing,” they said in a report released this week.

“For Havering, this is compounded by the failure of the previous [Conservative] government to update its distribution formula, resulting in Havering receiving up to £10m less a year than it should have received with a fairer distribution.”

Fellow east London councils, such as Redbridge and Waltham Forest, have made similar criticisms of the government’s “unfair” funding formula, which is still based on data from 2010.

In most cases, Havering’s proposed savings are achievable but not until 2025/26.

For example, a temporary estate of 18 modular homes, approved in May in a bid to reduce housing demand, will not be in use until January 2026 “at the earliest”. The £180,000 in savings will be incorporated into next year’s budget, officers said.

The town hall has also been purchasing property to use as temporary accommodation for at-risk families, though up to £300,000 in savings will not come into effect until next year.

Due to a shortage of housing across London, most councils are forced to keep homeless residents in expensive hotels or bed-and-breakfast-style accommodation.

If it becomes clear that departments will not meet their targets, directors will be told to identify alternative cuts and new ways to reduce spending, the report added.

Social care and temporary accommodation are the two greatest strains on Havering Council’s finances.

Top councillors were warned in August the council could go over its housing budget by £1.8m, and its adult social care budget by £2.3m, by the end of the financial year.

Last year, the town hall overspent by a total of £31.2m, forcing it to borrow £88m from the central government to avoid effective bankruptcy.

The remaining £8.6m in cuts allocated in the 2025/26 budget are on track to be made.

One of the most significant decisions the council has made was to close three libraries across the borough.

Though cabinet members said they were reluctant, having faced heavy resistance from opposition councillors and residents alike, it will save £288,000 over the next two years.

No permanent staff members have lost their jobs, officers added.

The council was facing a similar shortfall this time last year, when a report revealed it would fall short of its budgeted savings by £2m.

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