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- Written by Alison Holt
- social issues editor
Saturday night at Romford, London Borough of Havering.
From bin collection and street lighting to child protection and aged care, councils provide the services we all rely on, but a growing number of them in England are on the brink of bankruptcy. BBC Panorama has followed the struggle of one such authority and the people who depend on it.
It’s a humid Saturday night and people are out having fun at Dogs in Romford.
As greyhounds tear up this century-old racetrack, cash is rapidly changing hands among punters looking to place bets.
This is the London borough of Havering, where the eastern edge of the capital gives way to the county of Essex.
People are moving here for the green space and transport links, but we’ve only scratched the surface and many are angry.
Their local councils are fighting to prevent bankruptcy.
“We’re paying for a service, but it’s not being provided,” says one man, waiting for the start of his next race.
“This is tragic because if you paid council tax, the bins should be removed,” said another.
For the past five months, BBC Panorama has followed Havering Council as it struggles to make ends meet and struggles to decide which services to cut and which to protect.
It is a quiet crisis, but it is playing out in town halls across England and is shaping the quality of our daily lives.
Financial pressure on city hall
- Funding for councils across England is calculated based on census information from 13 years ago – 10% more people live in Havering borough than in 2011
- Mr Havering said 70% of council spending would go towards social care for adults and children, along with support for homeless people.
- Since the 2015 law changes, the number of young people covered by the Education, Health and Care Plan (EHCP) has doubled to more than 500,000, with some funding from Parliament.
- Over 10 years, the amount per person spent by councils in England on children’s services increased from £120 to £212 (77%), while equivalent spending on adult social care increased from £252 to £372 (48%). increased to.
Source: London Borough of Havering; DfE; County Council Network/Pixel
face difficult facts
In November 2023, Kathy Freeman, Havering’s chief financial officer, meets with councilors in one of City Hall’s wood-paneled rooms.
They are discussing the budget deficit, which Cathy says is “far from being manageable for the time being.”
The council expects to have an overspend of £21m on this year’s budget of £630m. It is predicted that there will be a difference of £32.5 million in the next financial year.
If Havering is unable to close the financial hole of more than £50 million over the next 12 months, Cathy will issue a section 114 notice, known as a council word of mouth, effectively declaring the council bankrupt. He will become the person you need to be.
Cathy Freeman, Havering’s chief financial officer, has lived in the area most of her life.
Experts say those authorities were not properly managed, but believe the situation is different for Congress, which is currently struggling to make ends meet.
This is a crisis that transcends political party lines. In Havering, the majority of councilors are from the Havering Residents Association (HRA).
As one of the district’s most senior officials, Kathy is well aware that cuts are necessary. But she is also a local resident.
“I’ve lived here since I was 7 years old, so I’m very concerned about the impact it has,” she says.
Savings plans that are being considered include reducing the number of bins collected, dimming street lights in the early morning hours, and increasing parking fees.A 4.99% increase in council tax is also being considered. City tax is the maximum amount that a city council is normally allowed to levy.
At the meeting, faced with the figures laid out before him, council leader Ray Morgon described it as “the most difficult budget in Havering Council’s history”.
“The problem is that many people think council tax money is primarily used to clean streets, repair roads and maintain libraries,” he says. “But that’s not the case.”
In Havering, 70% of the council’s spending goes towards social care for adults and children, along with support for homeless people.
One area of increasing demand is services for children with special educational needs.
Havering has a legal obligation to help people like 17-year-old Hurley. He had a brain tumor removed as a child and also has autism.
“I like being on the bus with my friends,” Hurley says.
The council renovated his home to make it more livable for his family and funded some of the expensive equipment he needed, including a hoist and wheelchair.
We also support Harley’s transportation to and from university. Every morning, a bus picks him up from home and takes him and the other students to school.
“He wants to be as independent as possible and is attending university, so transportation is a challenge,” his mother Ira said. “He needs to feel accepted and he needs to be able to experience as much as he can like everyone else.”
Havering provides school transport to more than 420 children with special needs at a cost of £6.5 million a year.
The city council is considering reducing the number of buses in its search for cuts. Car sharing may be an alternative for some students, but decisions will be made on a case-by-case basis.
Harley clearly recognizes its importance. “I like being on the bus with my friends. That’s my life now,” he says.
under pressure
Harley has an Education, Health and Care Plan (EHCP) in place. This is the key to gaining support for him.
Official data shows that since the law changed in 2015, the number of young people eligible for these plans in the UK has doubled to more than 500,000.
Growing demand for a wide range of children’s services is one reason why councils such as Havering are under such severe financial pressure.
County Councils Network and Pixel Financial Management have shared new analysis with Panorama on per capita spending on children’s services over the past decade.
Filmed over five months inside a city council on the brink of bankruptcy, Panorama explores why so many city halls across the UK are in financial crisis.
As decision day approaches, Alison Holt discovers how the cost of caring for children, the elderly and the homeless is soaring, threatening to push councils and other institutions across the UK into the red.
They found that in 2013/14, English parliaments spent an average of £120 per person, but this rose by 77% to £212 in 2023/24.
Over the same period, spending on adult social care increased from £252 to £372 per person, an increase of 48%.
And families are under pressure. Calls to Havering’s child protection helpline have increased by 60% over the past four years.
The number of children placed in residential care by councils is also increasing, and the cost of doing so is skyrocketing.
“These are children who have complex behavioral issues and concerns about exploitation and a need for safety,” says Tara Geer, Havering’s newly appointed director of children’s services.
“In the last 12 months, the most I’ve had to pay for accommodation was £28,000 a week. If the child were to stay there, that would be over £1 million a year.”
£9 million is spent on children’s services in the borough. As the city council continues to look for ways to save money, it expects to close three of its five children’s centres, although a focus on early support for families can prevent problems down the road. There is.
Mr Havering said that while demand for services had increased significantly, funding from central government had fallen in real terms over the past decade.
Like all councils in England, the funding Havering receives is calculated based on the number of people living in the area in 2011.
However, the population has now increased by 25,000 people, or 10%, since then. This includes a significant increase in the number of children by her 15%. This equates to 216 additional 30 classes for the school.
Housing is also a pressure point. More families facing homelessness are turning to councils for help.
Jonelle’s story
Jonelle lived in a hotel room with her three young children for seven months. They were evicted from their apartment as the private landlord decided to sell the property.
She has lived in Havering all her life, but there are very few places she can afford. She had looked at numerous homes, but she was never successful.
“There was a line of up to 20 people, and they all said they would give us six months’ worth of rent. It was very competitive,” she says.
Over the past year, more than 500 families have stayed in hotels in Havering. Five years ago there was nothing.
Jonelle was confined in a hotel with her children for several months.
Putting a family in a hotel costs the council around £24,000 a year more than living in a rented property. It’s a situation that doesn’t work out for everyone.
Jonelle feels it has a big impact on the kids.
“Every day is a different challenge,” says Jonelle. “When I go to buy food, I can’t buy much because I don’t have a refrigerator. I feel very helpless. But it’s either this or the street, so I try to stay strong.”
Last week, the family moved into a hostel with a small kitchen. Jonelle said she was told they could stay for 18 months.
new year, same problem
In January, the government announced additional funding to UK parliaments, including £500 million for services for adults and children. In Havering, council officials hope this will raise £2 million. This is welcome news, but it is not enough to solve the fiscal problem.
They asked the government for a loan of up to £54m.
England’s 19 councils have borrowed a total of £2.5 billion from central government this year.
The government says local councils are “responsible for their own finances and for setting council tax levels” and points out that they have been given additional funding.
He also said he had instructed Congress to “be mindful of pressures on the cost of living, while curbing unnecessary or wasteful spending.”
Labor has said it sees funding for local authorities as a priority. In order to increase the stability of the parliament, the current one-year fiscal year will be changed to a two-year fiscal year. They also plan to discuss a long-term financial settlement.
Liberal Democrats say they want to give parliament more powers and increase its funding.
The report said families in need face too many delays, social workers have too many caseloads, insufficient oversight and staffing shortages. Unusually, it also says more funding is needed to provide these critical services.
The council has apologized to Havering residents, saying children and families have been left waiting too long for help.
“Kick the can on the road”
In early March, just hours before MPs agreed on next year’s budget, Havering was told he would receive the government loan he needed.
Councilor Ray Morgon must sign a letter agreeing to the terms before the close of business for the day.
Council leader Ray Morgon: ‘Local government finances need a complete reset’
This means that not all the cuts will go ahead and de facto bankruptcy will be avoided, but Havering will be saddled with high debt repayments over the next 20 years.
“It’s reassuring on the one hand,” he says. “But, of course, that’s just a predicament for the future and we’ll probably be in the same position next year as well.
“We need a complete reset of the entire municipal finance system. It’s broken.”
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