Bankruptcy dominates council decision-making. Item 61 discussed the unfolding financial situation. Chris Wilkins (28 minutes) introduced the item in his ‘reading a shopping list’ style. Surprisingly, he sounds like a born-again Labour loyalist with a mission to rescue Havering after 14 years of Tory misrule.
The £52m government loan, negotiated with the Conservatives, is inadequate. Chris says the 2025-6 outcome will be minus £73m. Ominously, he (31) identified the Freedom Pass as a pressure point. Havering has many OAPs and the Freedom Pass is very expensive at £8m. Chris could be thinking of that as a ‘savings’ item. If the government does not increase Havering’s funding, Chris might have to consider a huge increase in council tax.
Ray Morgon, Gillian Ford and Chris love lobbying. It’s ludicrous and is the triumph of hope over experience. Ray (33) said the GLA expects 25% of councils to be bankrupt by 2026-7 along with Havering.
“To engage in discussion with the Government regarding a fix to the underlying budget issue the Council faces or agree a further capitalisation direction to allow time for funding reform to be actioned.”2
The recent Labour budget allocated £1.3bn for local government. Ray said Havering should receive good treatment because it’s virtually bankrupt. Interestingly, neither Chris or Ray mentioned that the interest rate for the £52m loan had been reduced by 1%. The 1% saves half million pounds in annual interest payments, which is £200,00 more than closing four libraries.
The government could lift the ‘cap’ on council tax increases, “It is unclear… whether…[the new Government] will allow authorities more flexibility regarding tax increases.”3
Chris won’t welcome empowerment. He prefers being a helpless victim. If the £21m shortfall is funded by council tax increases, it will be dramatic in an election year.
Notes
2 (Public Pack)Agenda Document for Cabinet, 06/11/2024 19:30 para 8.2
“….agree a further capitalisation direction to allow time for funding reform to be actioned.” This means that they intend to borrow long term for current revenue pressures. This is financial insanity.
3 ibid 8.3
Politics in Havering 