Julia Lopez, the Member of Parliament for Hornchurch & Upminster has provided residents with the following update relating to Havering Council's finances:
Dear Resident,
Thank you for your previous communication about Havering Council's budget. Over recent months I have been contacted by nearly 600 constituents who expressed similar concerns about the borough's financial sustainability. Throughout this period, I have provided regular updates on my work with both the council and the government. Last week, the council managed to pass its budget so I wanted to provide an overview of the situation as it now stands.
At the heart of the issue is a need to reform the Local Government Funding Formula, which does not accurately reflect changes in Havering’s demographics over the last decade - notably the sharp increase in the borough's child population and the high number of older people. Those changes have intensified demand for social care, which can be incredibly expensive. I had consistently lobbied for revisions to this formula and the previous Conservative government started a Fair Funding review to address the problem before covid disrupted things. In the meantime, significant uplifts to social care funding did provide much needed support for the council’s most in-demand services. However, the structural challenges within the overall funding formula remained and I supported the Council to access Exceptional Financial Support from government.
Against this already challenging backdrop, the new government has introduced a series of fresh pressures on the council via the Chancellor's Budget. Local authorities had their costs significantly increased because of changes to Employers National Insurance Contributions, which are driving up prices in the council's supply chain especially in social care. On top of that, the Local Government Finance Settlement has delivered the smallest increase in the council’s spending power since 2021, almost all of which will be wiped out by the National Insurance hike - a measure I have argued passionately against in parliament.
As a result, in January I arranged a meeting between the Havering's council leadership and government minister, Baroness Taylor, and I am glad that, following this meeting, the request for further Exceptional Funding Support has been granted. This allowed the council to set a budget at its Full Council meeting on 26 February.
While I am glad that the council has now been able to set a budget, I remain profoundly concerned at some of the measures included within it. I am particularly disappointed that the Residents Association administration chose to close three libraries, including Harold Wood library without first being clear on their proposals for the site beyond closure. The cost saving is minimal and very likely wiped out by associated costs of mothballing. I have also spoken to many constituents on this topic and, though I recognise that the council’s financial position means they need to take some tough choices, I do not believe this to be the right one and regret that the administration did not accept costed, alternative proposals put forward by the Conservative group and others - the administration only passed this measure by one vote in the end. For those that I have not previously communicated with about this topic, I set out my reasons for opposing this measure at: https://www.julialopez.co.uk/news/mp-labels-library-closures-huge-loss-and-pushes-more-answers
What’s next?
Granting further Exceptional Financial Support for Havering has allowed it to set a budget but this is only a short term measure, so I will continue the push for a review of the funding formula to benefit residents. We are already engaging with the Ministry for Housing, Communities and Local Government on this issue and I have reiterated my willingness to support the council in making the case for Havering. I will provide further updates on this work when available.
I will also be pushing the council to be clearer about its objectives for the Harold Wood library site and continue to explore ways in which a full library service there can be maintained. I know that a Friends of Harold Wood Library group has been established and I will be glad to work with them in this objective, I have also held discussions with the Harold Wood ward councillors to consider ways in which we can work together on the issue.
I hope that this update is helpful in clarifying my actions to support the council to address the fundamental challenges affecting its financial position but also where I have challenged it where I feel it is acting in a short-sighted manner. If you want to catch-up on any of my earlier updates on this topic, you can view them on my website at: https://www.julialopez.co.uk/news/update-havering-councils-finances
With best wishes,
Julia
