Havering Set for £40M Funding Boost But Council Warns It Won’t Fix Budget Crisis

Havering Council has outlined what the Government’s provisional Local Government Settlement means for the borough, amid headlines suggesting the authority’s funding will rise by more than £83 million.

The figure widely reported refers to Core Spending Power, which includes money raised locally through Council Tax as well as Government funding. A significant proportion of this increase is therefore not new grant funding from central Government.

Under the current proposals, Havering’s Government grant funding is expected to increase by just under £40 million between 2026/27 and 2028/29. This represents the first substantial uplift in grant funding the Council has received in more than a decade and is seen as a positive step.

The increase will be phased in. The Council is estimated to receive an additional £15 million in 2026/27, followed by a further £12 million in both 2027/28 and 2028/29. By the end of this period, Havering is expected to be receiving around £40 million more each year than it does currently. These figures are provisional and subject to confirmation.

The increased core grant funding also includes money to cover specific pressures and service demands. This includes funding linked to new responsibilities such as food waste collection, increased support for homelessness services, and higher funding for the Families First Partnership. It also includes the pooling of more than £3.3 million of previously ring-fenced grants into the Revenue Support Grant, along with the pooling of £8.4 million from the Better Care Fund into the Council’s baseline funding.

Despite these increases, the Council has warned that the additional funding will only partially offset rising costs caused by inflation and growing demand for services. It does not resolve Havering’s underlying structural budget deficit, which is currently forecast to be around £70 million.

As a result, the Council expects it will still need Exceptional Financial Support of approximately £90 million to £95 million each year from 2026/27 to 2028/29. This support allows councils in severe financial difficulty to borrow to balance their budgets.

The Council has already added more than £70 million in additional funding to children’s and adults’ services in recent years, much of which has been funded through borrowing. Even so, Havering’s unit costs at the end of the 2024/25 financial year remain below the average of neighbouring authorities.

Council officers say they will continue working closely with councillors to manage what are expected to be increasingly challenging financial conditions. Senior leaders are also continuing regular discussions with the Ministry of Housing, Communities and Local Government about Havering’s long-term financial sustainability.

However, beyond Exceptional Financial Support, the Government has indicated that it is unable to offer alternative solutions. This leaves the Council facing a difficult situation, with borrowing costs expected to rise and the level of financial support required likely to increase year on year.

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