Havering Council is predicting an overspend of £19 million this year in a report laying bare the extent of the local authority's budgetary concerns.
Published ahead of today's (September 28) cabinet meeting, the report describes the council’s position this financial year as “acute”, with the Medium Term Financial Strategy (MFTS) also indicating a £70m gap between funding and forecasted spend over the next five years.
Some £13m in savings were included in the 2022/23 budget agreed in March this year to achieve a balanced budget, including the cutting of up to 400 council roles.
However, while the report notes Havering remains a low-cost council “providing good services with high value for money”, multiple pressures have compounded to result in the projected overspend.
These include the cost-of-living crisis, which is impacting staffing costs and contracts, and rising interest rates.
Growing demand for adult and children’s social care, which constitutes 70 per cent of the council’s net revenue budget, is also having an impact, with a rise in complex cases and the significant increase in young people in the borough over the last decade providing further pressure.
The report additionally lists a number of challenges to setting the 2023/24 budget, including historic government "underfunding", with the council receiving more than £70m from the Revenue Support Fund in 2010 and only £1.5m from it in 2022/23
In response, the council has collated a series of savings proposals from each department.
These will form the basis of the forthcoming budget consultation paper, and include suggestions such as reviewing parking charges, reducing support for the voluntary sector and employment and skills funding, and restructuring services to become more efficient.
The report also says the council will continue to lobby central government, noting there is a "national concern" about the levels of funding received.
Cllr Chris Wilkins, cabinet member for finance and transformation, said the council is “taking all steps” to try and balance the books.
“We are really working hard to tackle all of this in the three months that we have been in power.”
He added that, while cuts will be unavoidable, he does not want to make many significant decisions “until I am confident we have done our due diligence”.
Following its review today, the report will then go to consultation between October and December, before it is scrutinised and presented to cabinet again in the new year.
There will also be a decision made on the proposal to remove the one-hour free on-street parking at today's meeting, and a review of changes made to the all-age autism strategy.
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