The £54m loan would cover overspend from this year and help decrease the £32.5m gap in the next budget.
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Havering Council has received a £54m loan from the government following bankruptcy fears.
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The council recently set up a budget which they said would be their “toughest budget ever”.
The administration looked to close a £32.5m budget gap, scheduled to rise to £81.9m over the next four years.
Failure to not drastically reduce its debt would mean that Havering would have to trigger a Section 114 notice – effectively declaring itself bankrupt.
The £54m loan would cover overspend from this year and help decrease the £32.5m gap in the next budget.
Havering Council is not alone in dealing with significant financial stresses. Multiple other borough councils are also looking at bankruptcy as a serious possibility.
For Havering, the combination of having the second oldest population in London and one of the fastest growing young people populations in the country has massively increased demand for adult and social care in the borough.
Councillor Ray Morgon, Leader of Havering Council, said in a cabinet that: “This is undoubtedly the toughest budget we have ever faced.”
This loan from the government will help in capping some of the more extreme measures proposed by the council. This includes not doubling the fees for parking charges as well as not introducing Sunday parking and charges in park car parks.
“[The loan] will provide local authorities with the tools to support their local communities, continue to reform their services for the long-term, and to help communities prepare for the future.”
“If this is not fixed, local government will be facing a bleak future”
However, Councillor Morgon, told the cabinet meeting that even with the loan, residents must not expect drastic change.
“Sadly, there is a limited number of changes that we can make due to our financial position and we have to propose a 5% council tax increase.”
Councillor Chris Watkins echoed Morgon’s sentiments, believing London councils need a more permanent solution rather than a short term loan.
He said: “If this is not fixed, local government will be facing a bleak future.”
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HeadlineGovernment approves £54m loan for struggling council on the verge of bankruptcy
Short HeadlineHavering Council receives £54m loan
StandfirstCouncillors have warned that the loan will not solve all of the councils budget issues.
Havering Council has received a £54m loan from the government following bankruptcy fears.
Listen to this article – powered by AI:
The council recently set up a budget which they said would be their “toughest budget ever”.
The administration looked to close a £32.5m budget gap, scheduled to rise to £81.9m over the next four years.
Failure to not drastically reduce its debt would mean that Havering would have to trigger a Section 114 notice – effectively declaring itself bankrupt.
The £54m loan would cover overspend from this year and help decrease the £32.5m gap in the next budget.
Havering Council is not alone in dealing with significant financial stresses. Multiple other borough councils are also looking at bankruptcy as a serious possibility.
For Havering, the combination of having the second oldest population in London and one of the fastest growing young people populations in the country has massively increased demand for adult and social care in the borough.
Councillor Ray Morgon, Leader of Havering Council, said in a cabinet that: “This is undoubtedly the toughest budget we have ever faced.”
This loan from the government will help in capping some of the more extreme measures proposed by the council. This includes not doubling the fees for parking charges as well as not introducing Sunday parking and charges in park car parks.
“[The loan] will provide local authorities with the tools to support their local communities, continue to reform their services for the long-term, and to help communities prepare for the future.”
“If this is not fixed, local government will be facing a bleak future”
However, Councillor Morgon, told the cabinet meeting that even with the loan, residents must not expect drastic change.
“Sadly, there is a limited number of changes that we can make due to our financial position and we have to propose a 5% council tax increase.”
Councillor Chris Watkins echoed Morgon’s sentiments, believing London councils need a more permanent solution rather than a short term loan.
He said: “If this is not fixed, local government will be facing a bleak future.”
Traders are complaining about a lack of compensation after building works have forced them to relocate their stalls to the road and decreased the customer footfall to local shops.
