Havering Council to argue for ‘bigger share of the cake’ as it faces government funding cuts
10:54 23 September 2016
The leader of Havering Council is continuing to take the fight to the government over fairer funding, saying reduced grants have seen the authority “starved of money”.
What the four-year financial settlement means
In February, the government confirmed a historic settlement for town halls, transforming the relationship between central and local government.
By the end of this decade, councils will be funded from revenues they raise locally, rather than central government grants. This will mean reductions of £19.5m in revenue support grants to Havering by 2019/20.
Councils have a deadline of October 14 to develop efficiency plans to qualify for a four-year settlement instead of an annual allocation. Changes include money the council receives from business rates.
Havering Council currently gets 30per cent of the money from business rates paid by workplaces in the borough, but this is set to increase to the full amount.
As a result, Havering will have to cover more areas in its budget expenditure, but what exactly these will be is not yet known.
The council is proposing to agree a four-year deal with the Conservative government which will result in reductions of £19.5million in revenue support grants by 2019/20.
Cllr Roger Ramsey has labelled the government’s distribution of money to the council as an “injustice” and said Havering was being unfairly treated.
He said: “Over the last 25 years or so, this council feels strongly that we have not had as much share of the national funding as we should have.”
The leader points to the fact that nearby boroughs like Barking and Dagenham receive around three times per head more in funding, and Redbridge gets about two times more.
Despite the big reductions the council faces, Cllr Ramsey says it is proposing to accept the offered settlement “under protest”, as the decision will provide certainty of grant allocation and allow them to plan in advance.
After grants get fazed out, Havering will argue the case to have a “bigger share of the cake” in business rates moving forward.
With Havering only receiving about £50m in business rates compared to boroughs like Westminster receiving £1b, the council will be lobby the government for top-up payments.
Cllr Ramsey claims falls in grants have put “considerable pressure on us” and led to the council reaching the point where they have had to make “significant savings”.
A big part of these savings have been made via OneSource – a back office merger between Havering and Newham which later included joint-working with Bexley.
The merging of human resources, IT, fraud and legal teams, among others, has created the largest public sector shared service in the whole of London.
But Cllr Ramsey is confident that residents should not worry about frontline services facing cuts before 2018.
“All is not doom and gloom for residents, as we are not expecting any exceptional increase in council tax or any significant worsening of frontline services up until 2018,” said the council leader.
“We continue to battle for a fair deal for Havering.”