Havering is bankrupt.
Ray Morgon, HRA Leader of Council, is outraged because Havering is a victim. The Conservatives destroyed local government between 2010 and 2024. Ray Morgon and the new Labour government are victims. They’re making decisions they hate and despise.
There has been 51.4% of inflation since 2010.1 In 2010, Band D Council Tax was £1505.2 This increased to £2208 in 2024,3 up 46.7%. Council tax has therefore, more-or-less, increased with general inflation.
Bankruptcy is a direct result of government policy.
In 2010, Havering was centrally funded with £70m annually. In 2024, this had fallen to less than £2m. A 97% decrease. Conservative governments introduced funding based on specific criteria. The baseline for grants was 2010. The world changed but the baseline remained inflexible.
The demography of Havering shows startling changes.4 Havering has more young and old people than in 2010. Both groups are heavy consumers of council services. The inflexible baseline has damaging outcomes with Adult and Children’s Services budgets out of control. There isn’t any *control* because they’re demand led and can increase in a moment.
Havering isn’t alone. The spectre of bankruptcy is haunting local authorities. The consequences of Conservative government policies are lethal.5 Ray Morgon has an £88m problem. Rachel Reeves’s problem is a gigantic £7.8bn. She has to fill the national funding gap. Her challenges are dominated by the NHS, Education and Defence. The Conservative legacy is catastrophic.
Ray Morgon’s decision to borrow £88m to meet current revenue expenditure was the result of force majeure. Both he and Rachel Reeves are victims of chronic economic mismanagement.
Notes
1 Inflation calculator | Bank of England
3 Council Tax bands and bills | London Borough of Havering
4 JSNA Demography Chapter 2023 v0.3A.pdf esp. pp6-7
5 Fair funding review modelling tools | Local Government Association
Politics in Havering 
Dear Chris,
New Labour promoted ruinous PFI (mickey-mouse accounting) and later supported New Conservative PFI and austerity because it was really EU austerity to keep UK within the “convergence and sustainability” rules for joining the Euro-currency.
Remember, UK was signed up to joining the Euro, but obtained a temporary opt-out in order to get the Maastricht (EU) Treaty through parliament, so our public spending (austerity) was based on keeping us within the rules so we could join Euro when that became politically possible.
But, Labour and Conservative due to influence of Sir james Goldsmith’s Referendum (Euro) Party had promised to hold a referendum before joining Euro!
However as a Euro-referendum was impossible to win New Conservative held an in or out of EU referendum to trump the,join the Euro-currency referendum promise.
In other words, Cameron (for legacy reasons) went for an (in or out) referendum he thought he could easily win and use a Remain vote (to trump the Euro-referendum promise) to take us in the Euro, proclaiming “you knew what you were voting for” or “Remain means joining the Euro”.
This would have resulted in a continuation of EU austerity (on UK) which was inflicting so much damage on Greece and much of Europe.
But after the Leave result we had the Globalist establishment backlash against Brexit (to punish the peasants) resulting in the Plandemic which crippled the finances even more and the criminal corporate communist, fascist (Conservative!) “Lockdowns” costing over £400 Billion (and then more madness with Net-Zero) were fully supported by Labour, making Labour as guilty as Conservative for the present financial situation.
And as a result of growing dismay at the Lab/Con “UNIPARTY” HRA gained the trappings of office, but alas are completely outside their comfort zone, hence their solution to poor funding is another petition!
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Thank you for your comment
Osborne aimed at a *small* state. He also hollowed out local government. This was done by having 4 years of zero increases in council tax. The cumulative effect was to bankrupt many local authorities. Local government implement the government’s social policies and as such are not independent decision-makers. They are victims.
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The UK secured a legally binding permanent opt out from joining the euro. It followed the rules as we were part of the single market. We were not subject to penalties if we broke the rules. Aligning with rules gave the markets confidence that we were acting in a fiscally prudent manner. Brexit is a disaster and has cost us a fortune. I’m not sure what backlash is referred to. And as for lockdowns, I think someone has been down the rabbit hole as it was obeyed by a majority of people, except the government itself.
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Thank you for your comment
Osborne believed in the *small* state and his 6 years in office was aimed at reducing the state. As a by-product he also hollowed out local government. He didn’t appreciate that local government is the conduit through which much of the government’s social policies are implemented. Hence Havering’s bankruptcy.
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Dear Chris,
Private Finance Initiative (PFI) Mickey-mouse accounting allowed successive governments to increase public spending (dubiously but officially using private money) whilst keeping within the public spending Euro-currency joining rules.
It was a very expensive way to fund public infrastructure projects normally funded by public sector borrowing, (hence why Queens hospital cost so much) but was deemed worth it as joining the Euro remained a priority policy objective for New Labour and New Conservative.
Public spending to fund public services was always there (as evidenced by the £400 billion found behind the sofa to fund the Plandemic) but withheld for political rather than economic reasons.
When the Leave vote ended all prospects of joining the Euro, the government immediately announced the end of disastrous PFI.
The hollowing out of local government has been the policy of New Labour and New Conservative, not simply by reducing funding but by transferring powers and funding to unelected bodies called Quangos, which has created a bigger state under guise of creating a smaller state and proving to be another disaster.
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Thank you for your comment
The Conservatives hollowed out local authorities as a policy decision. The Adult and Children’s services aren’t a quango they are statutory duties for local authorities. The homelessness crisis is also being catered for by local authorities. They don’t have the resources to cope with the escalating challenges. The law of *unintended consequences* is hard at work and has created a £7.8bn problem for the government.
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“The Conservatives hollowed out local authorities as a policy decision”. Agreed and Labour too.
And Labour support for open borders and never ending wars isn’t helping either.
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