Havering Council Faces £90M Loan Crisis Despite Funding Boost

Key Points

• Councillor Ray Morgon, Leader of Havering Council, warns that despite lobbying efforts, the council faces severe financial pressures in 2026 due to rising demands for adult and children’s social care, homelessness costs, and other escalating expenses.
• The Government’s provisional funding settlement provides an increase in core grant of £37.7 million over the next three years, plus £1.9 million for Family First Partnership Funding and support for homelessness and rough sleeping.
• This funding falls short of needs and must cover new mandatory food waste collection service, with reforms redistributing existing funds resulting in a lower deal for Havering than expected.
• To set a balanced budget, the council will seek a capitalisation direction – effectively a £90 million annual loan – for the medium term to protect frontline services.
• Ongoing lobbying targets fairer funding and waiver of loan interest.
• Despite challenges, priorities include cleaner streets via Where We Live campaign, support for businesses through Keep It Local initiative, investment in community safety with S92 police officers and digital CCTV, and more affordable housing.
• New Year message extends warm wishes to residents, thanking their contributions through volunteering, supporting neighbours, and local businesses.

Havering (The Havering Daily) January 16, 2026 – Havering Council remains in a very challenging financial position despite best efforts and Government funding increases, Leader Councillor Ray Morgon has stated in his monthly column. He highlighted the need for a £90 million annual capitalisation direction loan to balance the budget amid rising social care and homelessness costs. The provisional settlement offers £37.7 million more in core grant over three years but falls short of mounting pressures.

What Financial Pressures Are Facing Havering Council in 2026?

Councillor Ray Morgon outlined persistent strains as the council finalises its 2026 budget. Rising demand for vital services, particularly adult and children’s social care, alongside escalating homelessness costs, place extraordinary pressure on finances, as reported by Councillor Ray Morgon in The Havering Daily. This process mirrors recent years, shaped by severe challenges that complicate budgeting.

The council leader emphasised reflection and refocus on borough priorities entering the New Year. As we welcome in the New Year, I want to extend my warmest wishes to every resident across Havering. A new year brings with it a moment to reflect, reset and refocus on the priorities that matter most to our borough, stated Councillor Ray Morgon directly in his column published by The Havering Daily.

What Does the Government’s Provisional Funding Settlement Mean for Havering?

In December, the Government published its provisional funding settlement for local authorities. While we have been lobbying tirelessly for a fairer deal for Havering, and I want to thank everyone who has supported that effort, the outcome is still far from what we need, as reported by Councillor Ray Morgon of The Havering Daily.

The settlement confirms an increase in our core grant of £37.7 million over the next three years, alongside £1.9 million in specific increases for Family First Partnership Funding and support for homelessness and rough sleeping. While any increase is welcome – and reflects the strength of our lobbying – it still falls short of the rising pressures we face, Councillor Ray Morgon noted in his piece.

This extra funding will also need to fund the launch of a new mandatory food waste collection service, which is an additional burden for the Council. The reforms to local government funding have redistributed existing funds across councils, and as a result the deal for Havering is lower than we had expected and lower than what is required for long-term financial security, according to the column by Councillor Ray Morgon in The Havering Daily.​

Why Is a Capitalisation Direction Necessary for Havering’s Budget?

Despite our best efforts, the Council remains in a very challenging financial position. The unavoidable reality is that, in order to set a legally required balanced budget, we will again have to apply for a capitalisation direction – effectively a loan – of around £90 million per year for the medium-term period, Councillor Ray Morgon explained in The Havering Daily.

This is not a position any council wishes to be in, but it is the only mechanism currently available to protect essential frontline services. We will continue to lobby the Government not only for a fairer funding deal for Havering but also for measures that would ease the long-term burden on our finances – including asking for the interest on these loans to be waived, as detailed by Councillor Ray Morgon.

We will not stop making the case for the funding our borough deserves. This commitment underscores the council’s resolve amid ongoing fiscal constraints, per the reporting in The Havering Daily.

How Will Havering Council Prioritise Services Despite the Challenges?

Despite the financial challenges, our commitment to delivering for residents remains as strong as ever. This year, we will continue to make progress on the things that matter most, affirmed Councillor Ray Morgon in his monthly column.

Key initiatives include:

• Cleaner and greener streets, volunteering and community pride through our Where We Live campaign.
• Support for local businesses with our Keep It Local initiative, helping strengthen our high streets and local economy.
• Investment in community safety, including funding S92 police officers and expanding our network of modern digital CCTV cameras.
• More homes for local families, with continued investment in high-quality, affordable housing.

These are the priorities that make a real and tangible difference to people’s daily lives. And even in challenging times, we remain focused on building a borough that is clean, safe, supportive and full of opportunity, as Councillor Ray Morgon concluded in The Havering Daily.​

What Role Do Residents Play in Havering’s Future?

Thank you for everything you contribute to Havering – whether through volunteering, supporting neighbours, running local businesses, or simply being an active and caring part of our community. Your support helps us to make Havering a place we all want to be part of, stated Councillor Ray Morgon.

Councillor Ray Morgon shares his monthly column in the Havering Daily. Today, he talks about the difficulties Havering faces financially, introducing the piece that provides this comprehensive insight into the borough’s fiscal landscape.

Why Is Havering Lobbying for Long-Term Funding Reforms?

The council’s lobbying efforts have secured some gains, but persistent shortfalls necessitate broader reforms. The strength of our lobbying secured the increases announced, yet the redistribution of funds disadvantages Havering relative to expectations, as per Councillor Ray Morgon’s analysis.

Ongoing advocacy targets interest waivers on capitalisation loans and enhanced core support. This approach aims to secure long-term financial security, ensuring sustainability for essential services without repeated borrowing.

What Impact Will the Food Waste Collection Service Have?

The new mandatory food waste collection service represents an unfunded mandate atop existing pressures. The extra funding will also need to fund the launch of a new mandatory food waste collection service, which is an additional burden for the Council, noted Councillor Ray Morgon.

This requirement diverts resources from other priorities, exacerbating the funding gap. Councils nationwide face similar impositions, amplifying calls for central government assistance.

How Does Homelessness Contribute to Havering’s Budget Strain?

Escalating costs linked to homelessness continue to strain resources. Specific increases of £1.9 million for support for homelessness and rough sleeping form part of the settlement, yet demand outpaces provision, according to the column.

Councillor Ray Morgon highlighted this as a key driver alongside social care. Integrated funding like Family First Partnership aims to mitigate, but frontline delivery remains under duress.

What Community Safety Measures Are Planned?

Investment in community safety persists through targeted funding. This includes funding S92 police officers and expanding our network of modern digital CCTV cameras, as listed among 2026 priorities by Councillor Ray Morgon.

These enhancements bolster local security, directly benefiting residents’ daily lives. The approach aligns with broader goals of a safe borough.

How Is the Where We Live Campaign Progressing?

The Where We Live campaign promotes cleaner and greener streets alongside volunteering and community pride. Continued progress here fosters civic engagement amid fiscal limits.

This initiative embodies resident-focused governance, encouraging collective responsibility for the environment.

What Does the Keep It Local Initiative Entail?

Support for local businesses via the Keep It Local initiative strengthens high streets and the economy. Helping strengthen our high streets and local economy, it counters economic pressures through targeted aid.

Such efforts sustain employment and vitality in Havering’s commercial hubs.

Why Focus on Affordable Housing Now?

Continued investment in high-quality, affordable housing addresses family needs. More homes for local families underscores this priority, per Councillor Ray Morgon.

This builds on prior commitments, tackling housing shortages despite budgetary constraints.

What Is the Broader Context of Local Government Funding Reforms?

Reforms have redistributed existing funds, yielding lower outcomes for Havering. The deal for Havering is lower than we had expected and lower than what is required for long-term financial security, as analysed.

Councils like Havering advocate for equitable models to prevent recurrent crises. This national dynamic influences borough-level planning.