Havering Council will be forced to declare effective bankruptcy ‘by the end of February’ if the Government fails to provide more funding, the council leader has warned.
Cllr Ray Morgon has repeated his warning that the council faces insolvency and said the recently announced extra £600m for local government represented a ‘minuscule’ amount of support.
‘We have received the settlement figure from the Government detailing what monies we will be receiving from them during the next financial year. Unfortunately, once again, this Government has short-changed local government, with the minuscule rise in funding being even less than we had hoped for.’
The council puts its social care costs plus other inflationary pressures at around £49m in the next financial year. The grant increase announced this week by levelling up secretary Michael Gove represents £5.6m for Havering Council.
Cllr Morgon said the council was working with the Department for Levelling Up, Housing and Communities (DLUHC) to explore options for a capitalisation direction.
‘The Government have not indicated formally how long they will take to respond but we have made it clear that a response is needed by the end of February at the latest to enable the 2024/25 budget to be set at council,’ he said.
‘Failure to confirm the order by this date would leave the authority no alternative but to issue a S114 report through an inability to set a balanced budget.’
Somerset Council leader Bill Revans also warned this week that the £5m the council will receive from the settlement ‘will not help us overcome a projected budget shortfall of £100m for next year.’
If this article was of interest, then check out our feature, 'Preventing future Section 114 notices' and 'How to fix local government finance'.
