Havering’s Impending Bankruptcy: The Road to Disaster (part one)

Havering’s Strategy Director Kathy Freeman stated: “We are very close to issuing a section 114, [bankruptcy] even six months away from this happening. Our average resources cannot meet the financial requirements.¹

In 2010 Conservative chancellor, George Osborne,² (see addendum) began his attack on local government. Without profiling the financial needs of local government, he capped Council Tax increases to zero%.

Instantly, he demonstrated he didn’t understand two fundamental fiscal principles;

The corrosive impact of inflation
The corrosive impact of the compounding of inflation.

Osborne’s decision was based on ‘something for nothing’.⁴ He talked of ‘waste’ and ‘inefficiencies’ to confuse the electorate. Simultaneously, additional duties and responsibilities were imposed on councils.

Since 2010, British inflation has been 46.88%.⁵Havering’s stand still council tax should have increased at the same pace. In 2010-11 a band D was £1,505. This year, 2023-4, it’s £2,088.13. Inflation linked council tax would have brought the figure to £2,210.56. Havering is minus £122.43 per band D house. There are 107,798 houses in Havering and band D is the average. Osborne’s misunderstanding about inflation has cost Havering approximately £14 million annually.

But the Conservative chancellors weren’t finished with their attack on local government. They reduced government funding. In 2010, Havering received £70 million. In 2023-4, it was £2.9 million. A real reduction of £100 million per year.

The cost of Conservative policies, 2010-23, for Havering is £119 million per year. This is why Havering will probably go bankrupt.

Addendum: Conservative chancellors 2010-23 (their university degree in brackets)

George Osborne (History)
Philip Hammond (Philosophy, politics and economics)
Sajid Javid (Economics and politics)
Rishi Sunak (Philosophy, politics and economics)
Nadhim Zahawi (Chemical engineering)
Kwasi Kwartang (Classics and history)
Jeremy Hunt (Philosophy, politics and economics)

Notes

1 Havering Council balancing on the brink of bankruptcy-A ‘114’ could be issued within months. – The Havering Daily

2 Osborne was educated at private schools: George Osborne – Wikipedia

3 Council funding for taxi trips for Havering school children with special needs to cease (taxi-point.co.uk) “….reimbursement for fuel or a trip via ride-hailing service Uber would cost approximately £30 per day….disabled children will experience changes, ‘appropriate measures’ will be taken to ensure their needs are appropriately addressed.” The human cost of bankruptcy. The weakest and most vulnerable suffer first

4 The 2016 Brexit referendum ‘battle-bus’ is identical with the false claim that leaving the EU would ‘free up’ £350m a week for the NHS.

5 Inflation calculator | Bank of England

Havering’s Places Overview and Scrutiny committee, 14th September 2023

Two very contrasting items dominated this meeting. The first was a presentation by an enthusiastic officer who had a good story to tell. Ray Morgon has emphasised good communications with the public and so will be delighted to know that the call centre is putting in a stellar performance with a mere 30 second wait for response.

The perennial problem for councils is the management of voids. Here was a very good report where the housing stock has not been allowed to rot in extended periods of neglect. Mandy Anderson (32 minutes)¹ said that she’d noticed the improvement in housing maintenance in her casework.

The Green Flag Award recognises parks of a high standard. There is a great deal of civic pride involved in having 16 of Havering’s parks acknowledged in this way. The officer said 16 was the limit because of resource constraints. A spokesman for Friends of Raphaels and Lodge Park gave a presentation (51-4 mins). What was said was probably unwelcome. He felt Raphaels Park was unworthy of the honour and they’d nearly written to the Green Flag organisers to say so. For example, the grass had only been cut twice this year in June and September.²

Every councillor who contributed to this meeting spoke well.

Notes

1 Webcast Agenda for Places Overview & Scrutiny Sub Committee on Thursday, 14th September, 2023, 7.00 pm | The London Borough Of Havering All times relate to this webcast

2 David Taylor should find out what the contract for grass-cutting Raphaels park demands and see if this is a management problem or a designed failure.

Absences

Sue Ospreay, Kath Tumilty and Brian Vincent

Contenders for the coveted Damian White ‘Slacker of the Year’ Cup are four Councillors at 50% Philippa Crowder, Sarah Edwards, Robbie Misir and Christine Vickery. Current leaders for the cup are Councillors Robert Benham and Damian White at 43% attendance over six months.

Source Councillors attendance summary, 6 April 2023 – 29 September 2023 | The London Borough Of Havering

Havering’s Council Tax: The Government’s Exemption Policies

Ray Morgon uses apocalyptic language when discussing government funding. In 2010, before the Conservatives’ Age of Austerity, Havering received £70m. This was reduced to £2.9m in 2023. A £100m per year reduction when corrected for inflation.¹Religious buildings are zero rated for business rates and charity shops pay only 20%. Havering’s finances are damaged by these exemptions.

Uncosted exemptions reflect prejudices of by-gone eras.² The government imposes exemptions for religious buildings without compensation for the council.³ Voters haven’t a say as to whether they want to subsidise religions.⁴

“….belief in ‘a god’ in the UK is low. Only a quarter of Britons (27%) say they actually believe in ‘a god’. A further one in six (16%) believe in the existence of ‘a higher spiritual power’, but not ‘a god’.”⁵

As 73% of people aren’t religious, why do tax exemptions exist? It isn’t obvious why churches should get financial support from Havering.

Charities are different. Local charities command general support. St Francis Hospice is a well-loved charity in Havering. Their shops provide funds beyond normal charitable giving. Their accounts don’t acknowledge the value of the 80% business rate reduction. However, their reserves of £19.44m are helped by those reductions.⁶

Havering has had massive reductions in annual funding but can’t maximise its tax base. Government decisions about religion and charities are paid for by Havering’s taxpayers.

Notes

1 Inflation calculator | Bank of England

2 There are 110 Christian buildings in Havering which don’t pay business rates. Havering’s flagship church is St Edward’s, Romford. Its financial statement reveals the building is worth £16.24m and they have reserves of £318,000 de5291_4413260d7c764342a5681c27d3be80a8.pdf (stedwardsromford.com)

3 There are 7 charity shops on Hornchurch High Street charity shops in hornchurch – Search (bing.com) They don’t pay VAT and so have further commercial advantages. See VAT for charities: Overview – GOV.UK (www.gov.uk)

4 See Havering Council and Religious Diversity – Politics in Havering

5 How religious are British people? | YouGov

6 388190336.pdf (sfh.org.uk) See also do charities pay business rates uk – Search (bing.com)

Havering’s Places Overview and Scrutiny Committee, 18th July 2023

David Taylor’s debut as chair proved he’s affable and courteous. The principal items on the agenda concerned trees and Havering’s fleet of vehicles. Both items had officers presenting reports with skill and panache. It was refreshing to hear experts nimbly answering questions.

Trees are very complex. A ‘canopy’ cover in Havering was a surprise. What wasn’t a surprise was a discussion of fruit trees. Brian Eagling (39 mins)¹ and Gerry O’Sullivan (46 mins) spoke passionately about the damage, danger and mess they cause. They are an unintended consequence of the 1987 Great Storm, when there was no choice of replacement trees. The lack of maintenance was emphasised by Brian Vincent (34mins). Nonetheless the political consequences of stripping trees from streets was remembered by Osman Dervish (35 mins). Trees have passionate supporters.

The principal officers for Havering’s fleet of vehicles were a masterful double-act. The ULEZ programme has many ramifications. ULEZ fines were a burning topic and no-one believed the implementation August 29^th date will be postponed.²It seems Havering will pay about £88,000 in fines. This has incentivised the procurement of compliant vehicles. Air pollution was emphasied as a driving force in addition to efficiency though Climate Change wasn’t mentioned.

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Havering Daily: a comment

The e-newspaper did a survey of councillors about ULEZ.³ Not a single councillor mentioned Public Health, which was depressing. Even the Labour Party is trapped by a desire to have it both ways.

The Havering Daily should be congratulated for their efforts. And councillors who replied are sensitive to the democratic necessity of transparent dialogue – so they too should be congratulated. A surprising non-responder was Keith Prince – a ULEZ ultra.

Notes

1 Annotator Player (sonicfoundry.com) All times refer to this webcast

2 And they were quite correct as the High Court ratified ULEZ on the 28^th July

3 Havering Councillors Reveal Their Views on the ULEZ Expansion and Pay Per Mile Scheme – The Havering Daily

Havering Cabinet Meeting, 14th June 2023

Keith Prince’s inaugural meeting as Conservative leader began immediately (@4minutes)¹ with a complaint about exempt items. Strangely, he was quasi-apologetic, which contrasts with his usual combative style. Martin Goode continues to star in this committee and he should be a mentor to Keith. Martin does his homework diligently.

Martin’s comments (8 mins) were perceptive and helpful. He built on this later when commenting on the Climate Change report (24mins). Keith Darvill² discussed the use of heat pumps and Martin asked whether Havering was on the hook for conversion costs for the houses which are to be leased for the homeless. (LBH is leasing them for 10 years.)³ The question was asked but the answer? This problem clearly hadn’t been considered showing Havering’s failed understanding of a cross-cutting approach.

Gillian Ford made five contributions (12 mins) (19 mins) (27 mins) (29 mins) (35 mins) without offering insights. Keith Darvill’s (20 mins) cross-cutting Climate Change item was a golden opportunity for cabinet members to make departmental responses. Oscar Ford should have commented on the environmental impact of route design for school transport but didn’t. Paul Middleton’s new Leisure Centre is a huge energy user and a comment on that would have been helpful in a review of Havering’s Climate Change aspirations.

Climate Change is critically important and to passively ‘receive’ a report is a reckless dereliction of duty.

Notes

1 Annotator Player (sonicfoundry.com) All timings relate to this webcast

2 (Public Pack)Agenda Document for Cabinet, 14/06/2023 19:30 (havering.gov.uk) Item 7 is very interesting

3 See item 5 (Public Pack)Agenda Document for Cabinet, 14/06/2023 19:30 (havering.gov.uk) Summary statement 1

Havering Council Meeting – 12th July, 2023

There are 54 councillors and eleven¹ were absent from this meeting. Councillors Nunn and Mugglestone were attending a family funeral but the other nine? Twenty percent of councillors absent for a council meeting? Did they forget to pick up their £200 for this week?

The death of veteran councillor Linda Hawthorn was eulogised in various ways. Chris Wilkins (@ 25 minutes)², a family friend, sounded like a vicar who’d been given notes and then went through the motions. The contrast with Robert Benham (35 mins) couldn’t have been greater. A warm, kind and personal statement did both him and Linda proud.

Graham Williamson (43 mins) forgot to bring his petition to the meeting. A pitiful lapse. This provides a commentary on his organisational abilities.

Barry Mugglestone was absent for Question Time.³ Mischievously Ray Morgon arranged for Judith Holt to have meetings with Barry about Qs. 1 and 3. Martin Goode (1 hour15) asked a very pointed question about the King’s Park estate and the quality of its infrastructure. Jason Frost (1 hour 26) asked a good question on biodiversity and planning.

A motion on e-scooters was led by Robert Benham (1 hour 50). He highlighted their menace. Robert could have asked why Havering’s private million pound policeforce⁴ don’t enforce the law but didn’t. Mandy Anderson (2 hours 05) said the Over 50s Forum condemned e-scooters. The HRA amendment was pointless.

Councillor absenteeism is outrageous and especially Damian White’s.

Notes

1 John Crowder, Philippa Crowder, Laurence Garrard, James Glass, Robby Misir, Barry Mugglestone, Stephanie Nunn, Katharine Tumility, Christine Vickery, Damian White and Darren Wise See https://havering.blog/2023/04/08/haverings-councillors-value-for-money-march-2023/ for a discussion of this point

2 Annotator Player (sonicfoundry.com) All timings relate to this webcast

3 (Public Pack)Agenda Document for Council, 12/07/2023 19:30 (havering.gov.uk) Go to Item 9 p93ff

4 Havering’s million-pound contract is with the MetPolice for five policemen. LBH is paying and OAPs fear e-scooters and so let our police leap into action. Havering’s Million Pound Mistake, 2019-22 – Politics in Havering

Havering’s Strategic Planning committee: 8th June, 2023

The first item was strategic.¹ The council could agree a major development on the borough’s Green Belt. This decision effects the HRA’s beating heartbeat and is of the first importance. HRA councillors have built their political careers ruthlessly opposing Green Belt encroachments. Now it’s their policy.

Ray Morgon was unequivocal in his Leader’s speech at Annual Council.² He said the data centre is a Treasure Island. This is evangelical. HRA residents will hope his infectious optimism doesn’t cloud the committee’s judgement.

The council is proposing a novel, for LBH, planning route. That route is a Local Development Order (LDO). The chief officer masterfully explained why this is necessary. Gerry O’Sullivan summed up the committee’s comprehension by saying he hoped future documents were “understandable”.

An LDO provides levels of certainty for the developer and avoids planning application hazards, especially delay.

The next item was old-fashioned. Parking! What else stirs passions amongst elderly male councillors? The discussion focused on 168 parking spaces in a Rainham development. Despite officers repeatedly saying that those renting the units knew about parking restrictions, Ray Best was unmoved. Jane Keane voiced an alternative point-of-view. It was a cry in the wilderness. Councillors were as intoxicated as fox hunters in full cry. Reg Whitney claimed electric cars would worsen the problem.

Ray Best sulked after discovering there was a GLA imperative which might reduce the 168 spaces. A few remarks were passed about Sadiq Khan but it was low key grumbling.

Notes

1 Annotator Player (sonicfoundry.com) The webcast was abysmal with very uneven quality.

2 Annotator Player (sonicfoundry.com) from 1 hour 7 minutes

Havering’s Annual Council Meeting, 24th May, 2023

Havering’s Annual Council meeting¹ is a character-building event. Only political geeks should attend. Out-going mayor Trevor McKeevor, walks and talks like a mayor, so Stephanie Nunn, the new mayor, has a hard act to follow. An instant difference was Stephanie’s easy-going familiarity. She waved to people in the chamber. This included Robert Benham and her spiritual advisor (at 47 minutes). This is a sharp change in tone.

The death of Linda Hawthorn² was noted without eulogies. That will come at the council meeting on the 12^th July. She was a veteran councillor having served 33 years.

The meeting livened up when new Conservative leader, Keith Prince, tried to withdraw David Taylor’s nomination for a council position. He misunderstood procedure and Taylor remained on the candidate list notwithstanding Prince’s efforts to withdraw his name. Taylor was defeated 29-3 with three members not realising they were voting for a non-candidate.³ They demonstrated loyalty (beyond!) the bitter end.

The meeting concluded with Ray Morgon’s summary of the year. He had a good story to tell. Unfortunately, he ruined it with a disastrous metaphor about the sea – in landlocked Havering. His principal highlight was building a successful coalition. The low point was the ‘parking permit’ fiasco, which he⁴ gracefully accepted as being the antidote of a triumph.

Notes

1 For the webcast go to Annotator Player (sonicfoundry.com) All times relate to this source

2 See Havering Councillor: Linda Hawthorn (Upminster) – Politics in Havering for a summary of her exceptional position in Havering’s political life.

3 The voting was: 29 For the HRA candidate; 3 Against; 7 Abstentions. Interestingly these 39 votes out of 54 mean 15 councillors were doing something else.

4 The responsible cabinet members, Barry Mugglestone and Chris Wilkins, presumably accepted blame in private.

Havering’s Overview and Scrutiny Board: 30th March, 2023

The Overview and Scrutiny Board is Havering’s principal scrutiny committee. It has twelve members and ten attended this meeting. (Non-attendees were cllrs Summers and Damian White.)¹

Item 6, Corporate Risk Register, analysed risks to the budget. (Addendum One) Every risk is rated ‘high’.² The minutes of the ‘discussion’ are shocking.³ There was virtually nothing said about this ultra-specific report. Worse, the viability of the mitigation of risks was unchallenged. Proposed mitigation included wishful thinking…lobbying government. (Addendum Two)

Members discussed ULEZ’s effects on some care workers, which isn’t a Corporate Risk and wasn’t in the report. The existential bombshell below was in the report and was ignored.
“Difficulty in identification of further efficiencies and savings following a decade [actually 13 years] of Austerity and increased demand following the COVID pandemic.”
Translated: LBH can’t mitigate risk because the Conservative Austerity programme has destroyed the resilience of the council.

The budget is at ‘High Risk’ of failure. Gerry O’Sullivan should summon Chris Wilkins, LBH’s finance Tsar, to discuss his mitigation proposals. The O/S Board meeting with Wilkins will be an important building block in proactive scrutiny.

Addendum One: High risk factors for the 2023-24 budget

Financial Resilience – Inability to deliver a balanced budget as a result of:

Inadequate Government Funding
Rising Demographic pressures and/or increased complexity of Social Care
Rapidly increasing inflation
Cost of Living Crisis
Delay or non-achievement of planned MTFS savings
Inability to forecast due to uncertainty over medium term Government Funding
Uncertainty regarding timing of future Government funding reforms including introduction of the care cap (currently no sooner than October 2025), whilst being required by government to move towards the median cost of care.
Difficulty in identification of further efficiencies and savings following a decade of Austerity and increased demand following the COVID pandemic
Government changes in policy e.g. changes to Home Office refugee dispersal

Addendum Two: Mitigation of the risks to the 2023-24 budget

Early diagnosis of the financial gap to allow time for actions to be put in place including new savings proposals.

– Lobby the Government at every available opportunity to put the case for both lack of Funding for local government generally and more specifically how Havering is disadvantaged from the current distribution formula. (my emphasis)

– Work with national lobbying groups such as the LGA and London Councils to put the case for more funding to the Government. (my emphasis)

– The Council has developed over £30m of savings proposals (over 4 years) which are being consulted on to reduce the financial gap which will be monitored for delivery.

– The Council continues to review its structure to develop a new target operating model which both aligns with current service priorities but also delivers savings and efficiencies.

– The Council is in the process of reviewing the Capital Programme to ensure that all schemes continue to be viable (see regeneration section of this risk register for further details).

– The Council has developed action plans to mitigate and reduce the in-year overspend including:

All overspends reviewed and challenged to identify any non-recurrent spend which could be funded from reserves · All use of consultancy reviewed by senior management

Appendix 1: Source: HAV00005 p31

Notes

1 For enquiries on this agenda please contact (havering.gov.uk) Cllr Ruck is the vice-chair he attended the meeting via Zoom, which wasn’t noted in the minutes.

2 See p28 for details of categories of risk.

3 For enquiries on this agenda please contact (havering.gov.uk) Minutes para 39

Havering Councillor: Damian White (Havering-atte-Bower)

Damian has had a stellar career, which is now ending. First elected in 2010, he became deputy-Leader, 2014-18, and Leader of the Council, 2018-22. In 2019 he nearly became an MP in the Boris Johnson landslide.¹ That was his finest hour.

Damian controlled Conservative councillors with pot-of-gold politics. The allowance system was manipulated to ‘reward’ them. He relied on three RA² councillors, from Harold Wood, for his working majority. They too were richly rewarded.

The 2022 election was disastrous for Damian. Havering’s new coalition Administration³ didn’t include Conservatives. They lost power for the first time in 20 years. Collectively, losing the election cost them hundreds of thousands of pounds in allowances. Damian lost thousands of pounds as well as his status as Leader. It’s debatable which was worse.

Since the 2022 election, Damian has become an absentee councillor even though he remains Leader of the Conservatives. His attendance at committees is an appalling 33%.⁴It could be that he is having a gigantic sulk. What’s certain is that if he was an employee he’d be sacked.

The Conservative group’s Leadership election in May should see Damian replaced by someone more dynamic or, at the very least, visible. A likely successor is Keith Prince, seen here with Andrew Rosindell at a St George’s Day celebration.