Havering admits S114 fears

6th October 2023

The funding system for local government is "broken", the leader of Havering LBC has told LGC, amid concerns the council may issue a section 114 notice within the next 12 months.

A senior officer claimed to LGC that despite managing its finances well, the council was facing "structural" budget problems due to "years of being underfunded by central government".

Havering says it has identified over £160m in savings and efficiencies over the last ten years. But the funding it receives from the government has reduced from over £75m in 2013-14 to around £33m, while in the same period goods, services and other inflationary costs have risen by over 30%.

The council forecasts a budget gap of £31.2m for 2024-25, rising to £77.1m by 2027-28.

The borough has one of the oldest populations in London. This means that the number of adults in social care continues to rise, while the per-unit cost of providing this has significantly increased due to inflation. Havering also has one of the fastest-growing younger populations in the capital, which has led to a substantial rise in children requiring support.

The council is calling for an urgent review of the funding formula to "give Havering its fair share", and to be allowed to retain 100% of business rates over the next five years.

Andrew Blake-Herbert, chief executive of Havering described the current funding model as "being stuck in 2013".

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