Havering Budget Consultation 2025-26

Overview

Havering Council provides a wide range of services to our communities, spending around £200 million every year. Some of these services, called statutory services, are ones that we must provide by law. Others, called discretionary services, are ones we choose to provide. We know many of our services are highly valued by our residents but, as in recent years, we know we will have to make some difficult decisions during the setting of next year’s budget to ensure money is directed to where it is needed most.

Next year the authority is predicting a budget gap of around £74 million. This leaves the Council with few options to address the deficit:

• Another Capitalisation Direction (Government loan)
• Significantly increasing Council Tax beyond the Government’s proposals (this would require a referendum)
• Section 114 (effectively declaring the Council bankrupt with the possibility of Government Commissioners being sent in to run the Council which in itself would incur significant costs)
• Urgent intervention from the government (extra funding / funding formula review to reflect current population change and need)

Havering is in this position as the funding we receive from government no longer meets the rising costs and the borough’s changing population.  

In 2010, the Council received £70 million of Revenue Support Grant which is now £2 million today. The Revenue Support Grant coupled with other funding such as business rates makes up the Council’s core grant known as the Settlement Funding Assessment.  This has been reduced from £100 million to £40 million over the same time period. Despite the borough’s fast changing population, Havering’s core grant remains one of the lowest in London.

We have the second oldest population in London, together with the fourth fastest growing young population in the country. This has resulted in huge pressure and demand on social care for both adults and children meaning that over 70% of the Council’s budget is spent on delivering social care, which we legally must provide – and that figure is steadily rising.   In addition to this there has been a sharp increase in homelessness. This in turn has created an unprecedented pressure on both housing demand and costs for temporary accommodation – further adding to our budget pressures.

We continue to lobby the government for a fairer funding deal which accurately reflects the changing population and needs in Havering. Until there is a full review of the local government funding formula – we are left with no choice but to propose an increase in Council Tax and consider difficult savings proposals. To help change this you can help us lobby the government by signing our petition and writing to your local MP. 

This consultation comes as the Council and our communities are feeling the effects of additional social and economic pressures made worse by the cost of living challenge and housing crisis.  

We have done all that we can to stop this from happening and independent analysis has shown Havering to be one of the most cost efficient Councils in the country. Over the past 10 years, we have made around £160 million in savings and continue to work on finding further cost savings and income generation opportunities. But because we are already a low-cost Council, future savings are even more difficult to find. This leaves the Council with very few options to be able to set a balanced budget – which we must do by law.

Why your views matter

As we move towards setting the budget for next year, we are very keen to understand the views of our residents and key stakeholders. We are launching this budget consultation to give you the chance to tell us your views on how our proposals might impact you, the people you know and your communities.

We invite you to join us at this scheduled event: