Opened the debate
The London Borough of Havering faces a significant financial crisis due to increasing demands for statutory services, especially adult and children's social care, temporary accommodation, and homelessness support. The borough is forecast an overspend of £23 million with limited reserves and high reliance on council tax. Demographic pressures include the second oldest population in London alongside one of the fastest-growing child populations nationally, leading to a 57% allocation of all London's schools basic needs capital funding for 2025-26. Havering's budget gap is estimated at £31.2 million for next year and £77 million over four years.
Government Response
Simon Hoare
It is a pleasure to serve under your chairmanship, Sir Charles. I first of all thank and congratulate the hon. Member for Dagenham and Rainham (Jon Cruddas) not only for raising this issue, but raising it in the tone that he did. I am grateful to him for that. I am also grateful for the work that his council leader, Ray Morgon, is doing on behalf of his residents. The hon. Gentleman raised that, which I thought was very important. I will spend a moment or two setting the scene. It is not my intention to name and shame local authorities. I think the hon. Gentleman made an apposite point: we must all focus on the funding of the services that many of the most vulnerable citizens across the country rely on. As tempting as it is to try to play politics, I am not going to do so. Likewise, my door is open to those councils that are anxious that they are approaching the issuing of a section 114, because prevention is better than cure. The hon. Gentleman mentioned SIGOMA. I was with the leader of SIGOMA, Sir Stephen Houghton, this morning, discussing the issues that his member councils are facing. That meeting was very useful. We will work alongside those councils to ensure that they can stay standing up to deliver their services. The hon. Gentleman welcomed the changes that the Chancellor announced to the local housing allowance, and I welcome that. We listened to a whole variety of stakeholders, and there was general agreement that that is the right thing to do. Havering is receiving £14.2 million through the social care grant for 2023-24, a £5.8 million increase compared with the previous year's settlement. Additionally, we are providing £2.4 million through the market sustainability and improvement fund, £1 million through the discharge fund, and £6.8 million through the improved better care fund, which is already improving local health outcomes and supporting the crucial social care sector. Despite all those challenges, central Government have sought to provide big increases in funding to local government in recent years to try to address some of the reasons that the hon. Gentleman set before us. The local government finance settlement for 2023-24 made available up to £59.7 billion of funding for local government in England, an increase in core spending power of up to £5.1 billion on 2022-23—or, to put it another way, 9.4% in cash terms. Havering's core spending power as a council rose to £218.7 million—a 9.2% increase on the funding for 2022-23. I acknowledge the challenging position in which local government in England finds itself. We are all aware of the issues that have afflicted the national economy in recent years, but we would be negligent if we did not put them into our mix of thinking. Despite these challenges, we will continue to work alongside Havering London Borough Council to ensure that it can deliver not just the services demanded of it, but the services that the councillors and officers themselves want to deliver.