As we approach the budget consultation, Havering Council is making a lot of noises about the drop in grants it has received. In fact, one of the first things residents are told is that Havering used to receive £70m per year from central government and that it now receives just £1.5m.
This, understandably, worries a lot of people and leads to cries that we are being ‘underfunded’.
I’m not going to deny that Havering could do with a larger grant. But let’s take a more nuanced look at the situation.
Grant Cut
The grant was £70m in 2010/11, it slowly reduced down to just over £10m in 2017/18, then taking a large drop to practically £0 until 2021/22. It then went up to the current level of £1.5m.
Havering’s grant is based on a formula laid out by central government. It, put simply, looks at our ability to raise the money locally and then looks to fill in the gap. It is based on the idea that local people pay for local services. This looks at business rates, population, deprivation and so on.
As the nation entered a period of austerity, following the 2008 financial crisis, central government has been slowly reducing the money available for local government. The ask being that they adapt local services to become more efficient.
So, this is what’s been going on in Havering. For the last decade our Borough has slowly been reducing what it spends and improving the efficiency of its services. Aiming to spend every penny as best as it can.
Cutting Back Waste
How many times do we hear of governments handing out contracts to friends for inflated prices? How often do we discover that governments are overpaying for something because they didn’t negotiate the price, as a business would? Ever heard anyone moan about ‘overpaid executives?
If politicians were forced to negotiate better contracts, do you not think we’d get a fairer deal?
Our council has done a great job of the last decade. We’ve seen millions put into our road repairs budget, we’ve seen new leisure centres, we’ve seen new homes being built, parks maintained at a high standard. All of this done with the £1.5m grant.
Havering’s administration is taking the right approach. They are going through each contract line by line and identifying waste. Did it really need to cost £100k to lock the parks at night, or could we find someone to do it for £50k?
If we can find someone to do the job for less, whilst under strict controls about the quality of work, then I think we are duty bound to spend less. This is your money being spent.
Demographic Changes
As described above, the funding formula looks at our demographics. Funding for council services such as children, or adult social care, will be based on predictions as to how many residents will be using them.
Havering has seen somewhat of a demographic boom. We’ve got a lot of people living into their old age (I know at least half a dozen who are over 90) and we have a lot of children being born. These residents are ‘economically inactive’, meaning they cost the government money but don’t pay.
Not that I’m knocking that. They’ll pay in the future or have paid in already.
So, we’re seeing growth in people who ‘cost’ the government and council.
This should be accounted for in the formula however, the review of that formula has been put off for the last few years. This is where our budget gap comes in.
Should the formula be reviewed tomorrow, Havering’s grant would almost certainly increase.
What do we need?
The first bit is simple, the government must urgently complete it’s Fair Funding Review, to update our funding to meet the new demographics.
Second, the council does not need £70m a year from the government.
If you think it does, tell me how you’d spend the extra £68.5m. Break it down, line by line. £xm on this, £xm on that. Show me your workings out. Show me you won’t have waste.
Havering council must then put a £-figure to what it needs from central government. It can’t just talk about the £70m forever. The council should tell us how much extra they would spend and on what. Then, we can truly unite as political groups and fight for Havering.
We must also look at what we can generate locally. How many empty properties does the council have? How many deals, like the new datacentre, can they make? Can we enforce better on those abusing our planning and parking systems?
Let's get our house in order, before we go ask someone else to foot the bill for us. Let's do all we can, before we ask others to do it for us.