Havering Council has said it continues to “explore options” for a “substantial loan” from the government amid its financial crunch.

In a letter addressing local people, Havering Council leader Ray Morgon revealed that the council received the settlement figure from the government just before Christmas detailing the monies it will be receiving from them in next financial year.

This amount, he said, reflects a “miniscule rise in funding” being lesser than what the council had hoped for.

There was reportedly a small rise in council’s “core spending power” which includes increasing council tax without a referendum. This, Cllr Morgon said, will however put more strain on struggling residents and is a “mere drop in the ocean” in meeting its “rapidly rising costs” to carry out essential services.

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He added: “Despite our huge population rise in both children and older people, which puts our estimated social care costs at £45 million in the next financial year, the grant increase is a mere £5.6 million”.

In November last year, the council had announced it will be forced to declare bankruptcy if the government does not agree to a multi-million pound loan within three months.

The authority had said it needed the loan to pay for its day-to-day services after facing a £31 million overspend in 2023-24.

It had set out a savings plan to help cover £12m out of this through cuts in services like school transport for students with special needs and disabilities.

Cllr Morgon said yesterday that the council is still exploring options for the substantial loan from the government on which it will have to pay interest.

In addition, he said the council is in talks with the Minister for Local Government, Simon Hoare, to fight the council’s case once again for the government to stop using “out of date data”.

The councillor had earlier criticised the formula that is used to calculate how much funding councils need, which is based on the population data from 2011.

A final budget for Havering is expected to be presented in the coming weeks that could reflect the feedback received from public on the cuts proposed by the council.

Cllr Morgon added: “We will keep you updated in the coming weeks as we present our final budget to full Council, but please know that your involvement has been instrumental to the process, and I thank you for your support”.