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  • Writer's pictureDavid Taylor

What Happened At Budget Scrutiny?

Updated: Feb 14, 2023

In the run-up to the Labour/RA budget, due to be voted on at the end of February, 12 Councillors came together for what is known as the Overview and Scrutiny Board. We ran through 3 hours of questions and answers over the proposals, with Councillors from all groups getting involved.

Below are are few of my notes and key takeaways.

Scrutiny Works

The first thing to note is that the meeting worked brilliantly. Labour and the RAs both joined in with the questions and the meeting stayed away from descending into politics. We all agreed to extend the meeting to allow further questioning and the council Officers praised an example of "real scrutiny".

When we want to, Havering's politicians are more than capable of putting aside politics to do what's best for the Borough. We won't all agree on the various cuts and spending proposed, but we do all agree that questions should be asked.

The Overview and Scrutiny Board doesn't vote on the budget proposals, so no vote was taken. The report goes to the political Cabinet, where Labour and the RAs will vote on whether to implement it.

Current Financial Position

The proposed rise in Council Tax, by 5%, and a series of proposed cuts will mean that council balances its books this year. However, over 5 years, there is still a deficit of around £30m.

Much of this will be closed through Council Tax rises, so we're not staring at bankruptcy.

That said, the position is 'acute' according to the Section 151 Officer (the chap who has the balance the books, by law).

Havering council has around £30m in 'earmarked reserves' and a further £10m in 'general reserves'. This money can be used up fast if costs continue to rise.

The government grant was more generous than expected and Havering has around £18m more to spend this year than last. The grant increase however, does not match the increase in our population growth.


Havering Council borrows a lot. Hundreds of £millions.

Much of this is done through what's called the Housing Revenue Account (HRA). It is a ringfenced pot of money used to build and maintain housing. Havering Council has plans for the HRA to spend around £806m, of which £404 is to be funded through borrowing.

This borrowing will fund the likes of the Bridge Close development, which will then pay off that debt at around 30 years.

Havering Council borrows from a number of sources however, it's always borrowing at a fixed rate. This means that the borrowing does not rise or fall with inflation and the council can budget around it. In March-23, Havering Council is expecting to borrow at 4.25 - 4.60%, falling to 2.5-3.2% for borrowing in Dec-25. These rates will remain fixed for the duration of any loans taken out at those rates.

The Council also lends money.

Lending is done to other councils as well as Havering's developer, Mercury Land Holdings (MLH).

MLH is 75% owned by Havering Council but, it is not legally able to be subsidised. Havering lends MLH money at competitive rates, in order that MLH build and develop homes.

On the whole, I don't think this is a terrible strategy. However, I am not entirely comfortable with the Council becoming a property developer. This has gotten other boroughs in a lot of trouble.

Havering Council's loans are set to mature at different dates. Future borrowing will aim to avoid the spikes.

Government Grant

The rallying cry of this administration is, repeatedly, that Havering has lost £70m in funding. This is a bit of a play on things, but not untrue.

Havering's grant has been, slowly, reduced over the last decade. It has in most UK boroughs and it started under the much needed austerity programme of Cameron & Osborne. However, we have always managed to fill the 'gap.'

The model has essentially shifted from 'national funding for local spending' to 'local funding for local spending'.

What Labour and the RA compare is the % of our funding that is reliant on Council Tax and the % that is reliant on government grants. Places like Westminster have a much lower reliance on Council Tax. However, they receive a lot more in business rates.

The funding formula needs revisiting as it hasn't been for around 10 years. If Havering got what the formula says, based on our current population, we'd get about £1-2m more than we currently do. It wouldn't go anyway near far enough to tackle current pressures.

Rather than just comparing what we get vs other boroughs, I believe we need to compare what services cost vs other boroughs.

Is it beyond reasonable to assume a carer in Westminster will cost more than a carer in Havering? Perhaps a care-home in Walthamstow is more expensive than in Romford. I asked the Council to prepare a comparison of cost, so that we can see if we are getting a fair deal.

Havering's Section 151 Officer described the grant as "The most generous in a decade"

The Proposed Cuts

It wouldn't be a proper summary if I didn't outline the discussions we had over cuts and spending. I can't highlight them all, but below are a few example of what I raised.

Ask the elderly / vulnerable to buy their own equipment

At present, the elderly and vulnerable as supported in the purchase of equipment such as specialist toilet seats.

This is going to save the council £30k per year.

I asked to see the Equalities Impact Assessment for this cut, to see if the Council have considered the impact it will have. The council plans to 'direct residents as to where they can buy the equipment'.

I don't want to see our elderly and vulnerable having to shop around for a toilet seat. If we can't afford to provide them, can't we simply provide it and then charge? As opposed to giving people a catalogue or website?

Cut support for Telecare

Telecare systems are those red-cords people pull in an emergency. At present, Havering council pays for 1700 residents to have this. Apparently 1000 of those don't qualify for the subsidy and so they will be charged going forward.

This will save the council £400k over 4 years.

I've asked the council to provide information on what systems will be in place for those who need the system, but don't end up paying the bill for it. Will they lose it and become at risk?

Parking Charges

I'll do a whole other post on this, but the story is short one.

Havering council plans to sell off Romford's car-parks to developers. This will remove around 740 spaces from the town centre. Those remaining spaces will have their rate raised by 40%.

Free, 30 minutes, parking will be introduced in Hornchurch and Upminster.

A £30,000 waterfall

Did you know Havering Council is planning to spend £30k on a waterfall in a cemetery? me neither.

But, here is the plan, in black and white.

My question was simple. Why?

They'll get back to me. It may be an old contract that they have to honour.

Highways Cut

The last administration raised the road repairs budget by £10m per year. This new budget will be just £7m a year. A minimum cut of £3m.

I queried this, given the state our roads are in.

Officers say that this £7m was enough to "maintain the roads in their current state".



There is so much that I could pull out from this meeting. But, if you've read this far, you are one of the rare types. Thank you and well done.

The meeting was a success, in my opinion.

We didn't get all the answers, but we did ask all the questions. Officers will get back to us with answers over the next few weeks.

Labour and the RAs have had a tough job balancing this budget. Inflation has caused huge problems to Havering and Covid really hit our reserves hard. Similarly, our population has grown much faster than expected and this means a greater pressure on our local care system.

Ultimately, cuts have to be made.

That said, some cuts are always a political choice. There is where our debate comes in. On March 1st Havering Councillors will debate and vote on the proposals. They will pass, as Labour and the RAs make up a majority. But, we'll have good debate.

I'd like to see the council focus less on developing homes for private sale and more on building much needed social homes and emergency housing. For the first time, in a long time, Havering is having to place families back into BNBs. This is far more expensive than placing them in a home.

In the short term, at least, we need to tackle homelessness above developing.

Selling and renting homes to the private sector does generate Havering an income. But, we're in a crisis. We can build those private homes at a later date.

If you're a sucker for punishment, you can watch the entire security meeting on the link below.


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