Havering’s Council Tax 2025-6

Havering Council is bankrupt. The usual explanation is the cost of Adult Services and Homelessness. That’s glib. Council Tax was introduced in 1991 by a panic-stricken Conservative government reeling from the Poll Tax riots. They planned valuation reviews every five years, after which council tax would be recalibrated reflecting property price inflation. No reviews have taken place. Areas with massive property price inflation, like Havering, haven’t had council tax adjustments.

Havering’s Council Tax 2025

In 1991 a £320,000+ band ‘H’ house¹ in Havering had a council tax of £1070. This equates to 0.33% of its minimum value.

In 2025 a band ‘H’ property is worth about £2m.³ Council tax for band ‘H’ is £4,627, which is 0.23%. This doesn’t look much but it is a 30% difference.

Council tax has significantly reduced for band ‘H’’ property owners since 1991.

Inflation since 1991

Band ‘H’ houses were valued at £320,000+ in 1991. Using standard inflation, that increased to £733,720 in 2025.⁴ House price inflation is a multiple of standard inflation. A 1991 £320,000+ house is now £2,157,601,⁵ an inflation rate of 574%.

Council Tax is a failure

Political cowardice by governments has bankrupted Havering.⁶ Council tax is a failed mechanism for funding council services.⁷ Continuing to use 1991 valuations is ludicrous.

Correcting 34 years of inertia will take political courage………I’m not holding my breath.

Notes

1 Council Tax bands and bills | London Borough of Havering

2 Properties For Sale in Emerson Park | Rightmove

4 Inflation calculator | Bank of England

5 House price index | Nationwide

6 Havering Council Tax: Is It Too Low? – Politics in Havering This was written in 2020 but the analysis is still valid though the examples are historic.

7 George Osborne’s Age of Austerity programme, 2010-16, put the knife to the throat of Havering’s finances and matters more than sub-optimal increases in council tax.

Havering’s Bankruptcy and Margaret Thatcher

Thatcherite economics in 1979 was straight-forward. Income tax was reduced and capital assets lightly taxed to reward Conservative voters.¹ Lost revenue was replaced with massive increases in regressive taxes like VAT. George Osborne, a Thatcherite without the brains, introduced The Age of Austerity, 2010-24. His freezing of Council Tax ultimately made Havering bankrupt because lost revenue wasn’t replaced.

Ray Morgon borrowed £52m, at 7%, from the government to replace the lost revenue in 2024. This is like using credit cards for day-to-day spending, which is obviously insane. Worse, the council is selling capital assets to fill the hole Osborne made. (Bankrupt aristocrats call this, ‘selling the family silver.’) It’s a futile tactic to buy time.

In a full year, 2% of council tax will be needed to pay the interest on the loan.

Havering is bankrupt because council tax is too low.². Trivial *cuts* like four libraries reduce the deficit by £300,000.³ Havering’s budget is £180M.

What does inflation, 2010-24 tell us?

General inflation: 61%⁴

House price inflation: 100%+⁵

Council tax inflation: 46.7%⁶

The 2024-25 budget deficit is expected to be £32M.⁷This is caused by Council Tax not being inflation linked. Council Tax is a Property Tax.

House price inflation has been at least 100% because of the magic ofThatcherite economics. Wealth in assets is lightly taxed and rises in value. Or, as the Bible says, The rich get richer.⁸ Born-again Thatcherites like Andrew Rosindell probably know this. Meanwhile pot holes are a symptom of bankruptcy.

Ray Morgan and Gillian Ford should beg government for the freedom to set Havering’s Council Tax.

Notes

1 BBC Budget 97 “In his first [1979] Budget he raised VAT from….8% to a single rate of 15%….an increase in prescription charges from 20p to 45p and a major relaxation of exchange controls.” In the same budget higher rate taxation was reduced from 60% to 40%.

2 Havering Council Tax: Is It Too Low? – Politics in Havering

3 Havering launches new library strategy | London Borough of Havering

4 £1 in 2010 → 2024 | UK Inflation Calculator (in2013dollars.com)

5 House Prices in Hornchurch (rightmove.co.uk) 11 Ravensbourne Crescent, Romford increased 142%. 17 Ravenscourt Grove, Hornchurch increased 117%

6 Previous years’ bands | Council Tax bands and bills | London Borough of Havering Using Band D.

7 Cabinet agrees “toughest budget ever” | London Borough of Havering The actual out-turn won’t be £32M because much expenditure is demand led and not quantifiable accurately.

8 Matthew 25:29

Havering’s Cabinet Meetings: 11th September and 18th September, 2024

Item 6: 11^th September

Assure Havering residents that the Council takes Hate Crime seriously and has robust mechanisms in place to help combat/reduce such behaviour; and · Inform victims and witnesses about the various support options currently available, including how to contact those specialist agencies.^1,2 (my emphasis)

The government requires councils to have *Hate Crime* policies. The policy is for Havering’s housing tenants. Paul McGeary (36 minutes)³, read a statement. He has no enthusiasm, it’s as if it’s an unwelcome chore. Keith Darvill (42) worried about costs. When told there were no additional costs he was still worried, which was surprising.

The schizophrenic cabinet endorsed this policy whilst paying a fortune to a King’s Counsel (KC). The KC will try to sustain the council’s position on the suppression of their report on racism amongst council employees.² Institutional racism, of course, is a hate crime. The report will be uncomfortable and unwelcome. It is, in the words of the Tribunal which decided the Romford Recorder’s Freedom of Information request, “of overwhelming public interest”.⁴ Therefore, it should be published.

Item 10: 25^th September

This item is a Performance Report on the Council. The ‘score card’ categories are as follows:

“· Red = Below target and below the ‘variable tolerance’ of the target

Amber = Below target but within the ‘variable tolerance’ of the target
Green = Above annual target.”⁵

The outcome isn’t flattering, with 41% being RED and a cause for concern.

Interestingly the IT document transmission failed and Opposition leaders only received a summary report. Keith Prince (1:32) believed it should be made public. Reading the Leader’s *Body Language* this is unlikely to happen.

Councillors spent three minutes (from1:31) on this item. Chummy cabinet meetings, with lots of bonhomie, are a tragic wasted opportunity. The public is ill-served when a 41% failure rate is shrugged off without comment.

Notes

1 (Public Pack)Agenda Document for Cabinet, 18/09/2024 19:30 (havering.gov.uk) p579

2 Institutional Racism and Havering Council – Politics in Havering

3 Annotator Player (mediasite.com) Times refer to this webcast. There wasn’t any sound until this item. This gelled with the members’ criticisms about the poor Council’s IT interface.

4 Havering Council seeks appeal over racism report ruling | Romford Recorder

5 (Public Pack)Agenda Document for Cabinet, 25/09/2024 19:30 (havering.gov.uk) p184

Havering’s Impending Bankruptcy: selling carparks

The Council borrowed £54m to pay its bills in Spring 2024 (see Addendum). They are also selling carparks to avoid (postpone?) bankruptcy. Four are going.¹The Romford Recorder ² says they’re worth £9m and that’s why they’re being sold. The other reasons are,

“…they are underused and the aim is to have a better use of the land that can help the council reduce its waiting list backlog for affordable homes..”³

“Underused” is slippery. Two figures need stating, (1) target income, and (2), how big was the shortfall? How long will it be before the lost income equals £9m and, will the council tax from the new properties compensate?

Why is this important?

Finance is paramount when facing bankruptcy and trumps other considerations.⁴ Will the sales help or hinder the council’s problems? £9m is 11% of the shortfall over two years: it’s a drop in the ocean. And the revenue is gone for ever.

Selling income generating assets to fund revenue is insanity. The government is privatising Havering by the deliberate under-funding of statutory services.⁵ Voters will notice when quality-of-life assets are lost. But by then no-one will be able to do anything about it.

The government is forcing Havering to sell assets. The government doesn’t want to fully fund statutory services which Havering must provide. They don’t like the truth that: Taxes are the price we pay for a civilised society.⁶

Addendum: The Loan

This is a government drawdown facility for unfunded statutory⁵ bills. The loan is charged at 7% for 20 years. The interest for 18 full years is £68m. In brief, it increases Council Tax until 2044.

Notes

1 Issue details – Site Disposals under the Asset Disposal Programme 2022-2028 | The London Borough Of Havering

2 Romford Recorder 26^th April 2024 front page

3 loc.cit

4 The massive negative response didn’t see it like that at all. p18

5 Statutory services are those that the council must provide before anything else.

6 Taxes Are What We Pay for Civilized Society – Quote Investigator®

Havering Council: Budget Setting – 28th February, 2024

Question: Havering is going bankrupt.¹ What did councillors do in the budget?

Answer: Dug a deeper financial hole.

(They took a government loan of £54m, without increasing Council Tax to pay the £3.4m annual interest therefore adding to the shortfall.)

Chris Wilkins (11 minutes)² His dreadful speech showed a tragic lack of awareness.

Keith Prince (29) Two minutes of ‘Thank you’ name checks was ‘padding’. A more-or-less content free speech followed.

Keith Darvill (44) The government loan is expensive – £3.4m in interest – but the ‘only’ option. Otherwise, he made sound political points.

Martin Goode (56) His speech was hesitant and expressed dismay at the loan proposition.

Phillip Ruck (1 hour 05) He discussed the loan’s implications. The £54m will be consumed in two years followed by a death spiral!

Judith Holt (1:33) She pointed out the iniquity of the Residents Parking Permit for those living in terraced houses without off-street parking.

Barry Mugglestone (1:39) Oblivious to budget problems. He loves 30 minutes free car parking in Hornchurch, where he lives, and £900,000 for five police officers.

Mandy Anderson (1:44) A considered speech. The budget is a ‘valiant effort’, which is damning it with faint praise.

David Taylor (1:47) He said the budget involved choices. He illustrated this with the million-pound subsidy for Hornchurch carparking.

Martin Goode (1:53) He liked the idea of government commissioners. Nothing would change as the council had no control anyway. The loan was dreadful.

Keith Darvill (1:58) Havering should grow the economy and, therefore, get more council tax. This is ‘a wish and a prayer’ economics.

Keith Prince (2:03) More nit-picking.

Ray Morgon (2:08) Summary remarks claimed it was a “budget of necessity”, which sort-of conceded Goode’s point.

Best Speech: Phillip Ruck

Runner-ups: Mandy Anderson and David Taylor

Audacious Proposition: Dilip Patel – a lottery to pay off the £54m shortfall

Wooden Spoon: Chris Wilkins

Notes

1 Havering Council Tax: Is It Too Low? – Politics in Havering This is four years old but the principal points hold good

2 Annotator Player (sonicfoundry.com) Time refers to when speech began

Havering’s Overview and Scrutiny Board, 13th October 2022

There was a stench of despair in Havering’s discussions about the 2023-4 budget.¹ The public consultation process will fail because residents don’t understand council budgets. They also think this budget is rearranging deckchairs on the Titanic.

Beginning with George Osborne’s Age of Austerity, 2010, local government has been starved of funds. His insane ‘policy’ was compounded with zero Council Tax increases followed by inflation ‘caps’. Havering’s lost a minimum of £70m annually since 2010 not including the ‘lost’ revenue from actual inflation increases.

The decline in funding has been accompanied by increased responsibilities in Children and Adult services. These services consume 70% of the budget, making an inexorable push towards a Section 114 notice which means decision making is put in the hands of the government.²Havering’s CEO was bleakly frank about this possibility. He said current section 114 notices applied to imprudent, badly managed councils but future notices would hit well run councils like Havering, which had run out of resources.³ In brief, Conservative government policies are bankrupting local government.

The council will lobby MPs and ministers. The CEO held out little hope but he’d work hard to get Levelling-Up money.

Addendum: How councillors reacted

Gerry O’Sullivan drew contributions from every councillor. Questions ranged from the abrupt, Mandy Anderson, (@21 minutes)⁴ to windbag, Philip Ruck (@50 minutes). Philip asked the killer section 114 question, eliciting the important CEO response. David Taylor’s (@71 minutes) dog-whistle questions didn’t get the preferred answers. Damian White worked hard as ‘lead’ opposition councillor. The others seemed over-whelmed by the complexity of it all.

Notes

1 Annotator Player (sonicfoundry.com)

2 CP524_financial_sustainability_Oct_2021.pdf (publishing.service.gov.uk)

3 Hear the comment @ 55 minutes

4 This is when she began speaking

Havering’s Cabinet: A First Assessment

The cabinet complained about government under-funding,¹ which is like sailors hating the sea. There was no discussion about the energy crisis, home-working and office accommodation, staffing and retention, interest rates and ways of dealing with any of this in 2023.

Chris Wilkins: (began²) He spoke repetitiously and occasionally lost his place. He neither highlighted pertinent issues nor contextualised them. He offered counsels of despair.

He hasn’t discovered he’s a policy maker.

Gillian Ford: (20 minutes) She leads the principal cost centre, Adult Services. Her brief comments included an anecdote about a quadrupling of staff for a care issue. Typical? Probably not – just pre-emptive shroud waving.

Her remarks were inadequate. Cabinet needed insights on her principal revenue vampire: staffing costs. (pro rata cuts would be £6.5 million of the £19 million needed)

Keith Darvill: (21) Keith didn’t comment on his budget, preferring waffle. Flooding is a significant problem but can costs be subsumed into current budgets? Ambitions needed outlining especially if involving capital and ‘Invest to Save’.

Keith’s speech needed preparing up front.

Ray Morgon: (24) Ray’s interventions gave momentum to the debate. He claimed that if the public understood that 70% of the Council’s revenue went on statutory services, they’d accept a deteriorating environment. Laughably, he thought Conservative MPs would lobby for more funding.

Graham Williamson: (32) His speech included the phrase ‘Perfect Storm’ to describe financial pressures. He was stoical about losing popularity when cuts bite. He worried about the Council losing control to Commissioners on the balanced budget issue.

The best speech of the night.

Barry Mugglestone: (42) He spoke about increasing car parking charges which, surprisingly, isn’t an increase at all – it’s a return to pre-pandemic charges. So that’s all right then.

He read his speech, which other cabinet members should copy.

Oscar Ford astonishingly didn’t speak. He’s lead member for Children’s Services, which destroys everyone else’s budget. Nothing! Not even, ‘Thank you’. (pro rata cuts would be £6.5 million of the £19 million needed)

Paul Middleton: (1:02) He ought to be aware that his budget is likely to be savaged. He supported the budget propositions as being responsible.

Addendum: Government funding 2010-2022

Government funding has declined from £70 million to £1.5 million. This decline began with George Osborne in 2010. If the £70 million had increased with inflation it would have become £96.4 million. The real shortfall is £94.9 million. Conservative governments have increased taxation by outsourcing it to local authorities. Havering’s two Conservative MPs have been the cheer leaders of this policy.

Inflation calculator | Bank of England

Notes

1 Cabinet meeting 28^th September 2022

2 Annotator Player (sonicfoundry.com) Times when they begin speaking, are in brackets

Havering’s Environment Overview and Scrutiny Committee, 21st July, 2021

Havering’s councillors are getting livelier. All five councillors, who were present, spoke. The energetic Darren Wise and Michael Deon Burton made five contributions each. Michael tends to be more conversational than Darren but, let’s not quibble. Darren set the Gold Standard. His first query cited a page reference (p39: appendix ‘A’ if you’re interested). There were also contributions from councillors Carole Beth and Matt Sutton along with the Chair, which is sort-of-obligatory so isn’t noteworthy. Nic Dodin was absent and I don’t think he was missed.

Item 7 was interesting. The funding of LBH’s traffic schemes turns out to be complex. There haven’t been any schemes completed since May because of funding issues with Transport for London. They in their turn can’t approve anything because the funding stream from the government has dried up. So LBH have green lighted injury reduction schemes and they can’t commence. Darren was disappointed that his pet scheme in Cambourne Avenue has failed at this funding hurdle. Interestingly no-one complained about this new wave Austerity programme which has been introduced by stealth.

There was a similar sub-text to the Rainham Creek item, Item 8. On this occasion it was the Environment Agency who haven’t coughed up. There will be a Topic Group on this issue, which will start after contractors have costed the clean up and remediation works. The wider point about flooding in the borough was touched on by the Chair, Carole, who described her personal experiences of flooding, and Darren.

Zoom continues its challenge. I don’t understand why senior officers were presenting items from home and in one case from her garden. The presentation of supporting documents was abysmal. Surely if councillors can attend in person so can officers.

Note

For the agenda see (Public Pack)Agenda Document for Environment Overview & Scrutiny Sub-Committee, 21/07/2021 19:00 (havering.gov.uk)