The leader of Havering Council has warned that the London borough was facing insolvency due to increases in social care and homelessness costs.
Ahead of a cabinet meeting tomorrow, Cllr Ray Morgon said that while the council was ‘well-run’, dramatic increases in social care and housing costs, cuts in Government funding and the impact of Covid has made it hard to set a balanced budget.
The council has £48m in reserves and a projected overspend in 2023/24 of £23m. Next year, the council is facing a potential gap of £14m rising to £51.8m over a four-year period to 2028.
Cllr Morgon said that the council would continue to work hard to find savings but warned ‘you can see at this rate how we will potentially be insolvent.’
‘I’m afraid I can’t shy away from the fact that the situation is desperate. We are now at the point where bankruptcy (by the issuing of what is known as a Section 114 notice) could happen in the next six to twelve months.’
If this article was of interest, then check out our feature, 'Preventing future Section 114 notices' and 'How to fix local government finance'.
