Report: 2025-2029 Medium Term Financial Strategy Update

Presented by: Councillor Chris Wilkins (Cabinet Member for Finance)

Summary:

This report provides an update on the progress towards setting the Council’s budget for 2025/26. The report includes the latest monitoring position for 2024/25 and how this will impact on the 2025/26 budget. The report sets out the national financial context following the General election in July and how this might affect the budget position. At the time of writing the report, the measures proposed in Autumn Budget are yet to be announced.

The report updates the medium-term financial strategy taking account of the latest assumptions and includes detail of proposed growth and savings for the budget. The report shows the remaining gap facing the Council for 2025/26 and the cumulative estimated gap over the next 4 years. The report focuses on the Council’s General Fund position. A further report on the Council’s Housing Revenue Account position will follow in January and the February budget report will contain additional information on the Dedicated Schools Grant, Capital and Treasury management strategies.

Due to years of systemic underfunding based on data from over a decade ago, the government grant Havering receives no longer meets the fast-changing demands on the Council’s services. Despite putting forward a sizeable savings programme of £15.3m, 2024/25 was the first year the Council was unable to set a legally balanced budget report without Exceptional Financial Support from the Government. This report sets out the impact of the capitalisation direction agreed for 2024/25 and the implications if future capitalisation directions were used to balance future years.

The Council will continue to engage with our community openly and transparently, raising awareness of the Council’s financial challenges and the proposals put in place to respond to the significant financial challenges ahead.

The Council continues to deliver for its residents and the community. A number of the initiatives the Council has delivered and/or is progressing with is captured in this report.

Cabinet:

Noted the medium-term financial position set out in this report

Noted the proposed savings and investment set out in this report and authorised officers to start the budget engagement process, including specific consultations (where required) to deliver the savings in this report.

Noted the position regarding further exceptional financial support from the Government and agreed to the proposed steps to lobby the Government on this matter.