01708 741075
Advertisement
  • Time 107.5 fm
  • 10 AM - 2 PM

ON AIR NOW

Daytime

With Mark Dover

No guarantee given to Havering Council of borrowing to avoid bankruptcy

Havering Council is facing a severe financial crisis

Havering is facing a severe financial crisis as it battles to balance a £31million budget gap by the end of the financial year in March.

(Written by Local Democracy Reporter, Josh Mellor)

The government will not give Havering Council a “guarantee” that it can borrow millions of pounds to avoid declaring itself effectively bankrupt.

The vast majority of the council’s overspend is on social care and housing the homeless.

As a local authority, the council has a legal duty to approve a balanced budget by 11th March each year.

Without the loan, the council’s only choice would be to declare itself effectively bankrupt by issuing what is known as a Section 114 notice.

Last month, the council asked the government for a large loan in a final bid to balance its books and avoid bankruptcy.

At a meeting on Wednesday (18th January), chief executive Andrew Blake-Herbert said the council has scheduled an “extraordinary” council meeting on 6th March because the government cannot guarantee it will approve a loan before Havering’s planned budget-setting meeting on 28th February.

The Department for Levelling Up, Housing and Communities (DLUCH) is understood to be “assessing” Havering’s request for a loan.

However, the department has not responded to requests for comment.

Issuing a section 114 notice would mean the council has to stop all new spending other than for legally required services such as social care, waste collection, and protecting vulnerable people.

It could also mean that control of council spending is taken from democratically-elected councillors and handed to government commissioners.

Speaking to the Local Democracy Reporting Service (LDRS), council leader Ray Morgon said the government appears “very much sympathetic” to the council’s financial plight.

However, he added: “I don’t think that gives an indication of whether they will say yes or no [to the loan].”

It remains unclear exactly how much Havering Council has asked to borrow.

Havering Council’s leader Ray Morgon says the government has “short-changed” the council in its grant funding for next year (2024/25), which is set to increase by 4.49% to £39.5m.

Cllr Morgon said this increase is a “mere drop in the ocean” and is “even less” than expected.

The Local Government Association (LGA) has said the lack of government funding for councils across the country will create a £4billion gap in the next two years.

In a statement released last month, the LGA called the low level of funding “unthinkable”.

However, Secretary of State for Levelling Up, Housing and Communities Michael Gove has said councils will have “the support they need”.

Tags: ,
Want to read more news ? Read More News

Listen to
Time 107.5 FM
also on

iphone android

Other Stations

Lyca Gold 1035

Lyca Radio 1458

© TIME107.5fm 2015-2024. All rights reserved.