“Exceptional levels of need and deprivation” as well as outdated funding formulas blamed instead on reason for council’s difficult balancing next budget, reports Grace Howarth, Local Democracy Reporter

George Meehan House and (inset) Dana Carlin — George Meehan House and (inset) cabinet member for finance Dana Carlin

Councillors have raised concerns over Haringey’s ability to balance its budget amidst a £37m request for government support.

Committee members at an overview and scrutiny committee last week (Thursday 30th) questioned the council’s finance bosses over what the future held.

In December, the council applied to the government for £37m in ‘exceptional financial support’ (EFS) to help balance its 2025/26 budget.

In November a £32m gap had been identified, which was partially eased by a £16m additional settlement from the government over Christmas.

However, given continued high demand for services, particularly adult social care and temporary accommodation, the council is now reliant on the exceptional financial support to balance its upcoming budget.

EFS allows councils to use capital reciepts or extra borrowing to cover their day-to-day spending for a set period of time.

Taryn Eves, Haringey’s director of finance, said the draft budget for 2025/26 had been prepared on the basis that the EFS application was agreed.

She said: “We are not in a position to set a balanced budget without the use of exceptional financial support. We talked quite sensibly about this back in November and with panels as a contingency measure for 2025/26 and then we submitted an application before Christmas.

“We will not know whether we’ve got an agreement on that until the end of February, that is caveated throughout the report.”

Committee member Lester Buxton said he was glad the council was being “realistic rather than optimistic” in its application for help.

Cllr Buxton queried what would happen if the support was denied. He went on to say if the circumstances were positive and the support was granted what would happen if the amount still wasn’t enough.

Cabinet member for finance Dana Carlin said firmly that the government did not want “30 councils” to all issue Section 114 notices.

A Section 114 notice is issued when a council cannot balance its budget, meaning the council is facing effective bankruptcy.

Cllr Carlin said the government had “encouraged” councils having difficulties to make applications.

She said: “That’s why the chances of the government not agreeing to our application are very slim. The reason we’re in this position is not because we’re a terrible, badly-run council using money inappropriately.

“The reason we’re in this position is because we have a borough with exceptional levels of need and deprivation. The decision was taken to change the funding formulae in 2010/11 and again in 2015/16 and boroughs like Haringey saw the greatest cuts to funding. This means that we have around £143m less budget [in real terms] than we would have.

“We have such high demand pressures that we have been unable to balance the budget.”

The local government funding model has been criticised by the council and deemed “outdated” for not taking into account current pressures.

Taryn said there were “very few options” if the application was denied and hoped it was not a position the council found itself in.

She added that, if granted, the council would then need to demonstrate it was making “proactive progress” in-year.

The director of finance said: “I really want us to be in a position where we’re not reliant on the exceptional funding support beyond 2025/26.”

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