The Overview & Scrutiny Board of Havering Council met on Wednesday 04 February 2026 to discuss ombudsman complaints, contracts procedure rules, and the council's budget for 2026/27. Key decisions included noting the significant financial gap facing the council, the need for exceptional financial support, and the proposed council tax increase.

Ombudsman Complaints 2024-25

The board received a report detailing ombudsman complaints for 2024-25. Sandy Hamburger, Assistant Director of Insight, Policy and Strategy, presented the findings, noting that the maladministration rate for HRA-funded services was in line with national rates at 80%, while for local government's social care, Havering performed better than the national average with six cases per 100,000 residents compared to the national average of nine. Councillors raised concerns about the high percentage of upheld housing ombudsman findings, particularly regarding property conditions and complaints handling. Specific improvements expected over the next 12 months were discussed, including weekly meetings with contractors and in-house services to address common themes like communication and premises condition. The potential involvement of cabinet members in the complaints board was also explored.

Contracts Procedure Rules

Ewan Beals, Head of Procurement and Contract Management, introduced a report on the Contracts Procedure Rules, highlighting the significant changes brought about by the Procurement Act 2023. The council currently operates under three different sets of procurement legislation, making the process complex. The current contracts register accounts for approximately £227 million. The top three contracts by annual spend are waste property services, Adecco for contingent labour, and Marlborough Highways for highways maintenance. The report detailed the council's three banding routes for procurement and the legislative requirements for different types of contracts. Discussions focused on how cumulative outcomes are measured against council priorities, the dispute resolution process, and the potential for financial savings from the largest two contracts due for re-procurement. The introduction of a multi-disciplinary works contract was highlighted as a way to achieve economies of scale.

The Council's Budget 2026/27

Cathy Threeman, Strategic Director of Resources, presented the draft budget papers for 2026/27 and the Medium Term Financial Strategy (MTFS) position from 2026/27 through to 2028/29. The council faces a significant financial gap, with a projected £73 million gap on a mid-case scenario and £84 million on a worst-case scenario for 2026/27, even after accounting for savings and the full benefit of fair funding reforms, alongside an assumed 4.99% council tax increase. The MTFS indicates an unsustainable financial position, forecasting a £90 million budget gap per year for years two and three. This necessitates requiring exceptional financial support or a capitalisation direction for the remainder of the current MTFS. The impact of borrowing for exceptional financial support means that by 2028/29, the council could accumulate debt of approximately £300 million, with borrowing costs estimated at £28 million per year.

The capital programme reflects changes seen in January cabinet, with approximately £30 million of new capital expenditure planned, largely funded through grants and investor-save projects. The Treasury Management Strategy, required under the SIFPA code of practice, includes prudential indicators demonstrating affordability and sustainability, though the exceptional financial support means the council cannot comply with prudential indicators regarding affordability and sustainability for this borrowing.

Members raised numerous questions regarding the sustainability of the MTFS, the specific measures to close the budget gap, the use of capital receipts, the impact of the Prudential Code non-compliance, and the integration of the improvement and transformation plan. Concerns were also raised about the potential impact of political risk on capital projects, the cost of extending free parking, the challenges in data sharing between agencies, and the discretion applied to fees and charges, particularly concerning stillborn babies. The council tax increase, the national insurance increase, and the overall indebtedness of the borough were also discussed.

The board discussed the potential for council tax increases to balance the budget, with a 1% increase estimated to generate approximately £1.7 million. The significant cost of borrowing for exceptional financial support was highlighted, with debt financing costs forming a substantial portion of the future budget gap. The council's commitment to delivering EDI policies and the resources available for planned restructures and projects were also debated.

Finally, the board discussed the potential for council tax increases to balance the budget, with a 1% increase estimated to generate approximately £1.7 million. The significant cost of borrowing for exceptional financial support was highlighted, with debt financing costs forming a substantial portion of the future budget gap. The council's commitment to delivering EDI policies and the resources available for planned restructures and projects were also debated. The board agreed to recommend a series of actions to Cabinet, including aligning the improvement and transformation plan with the budget, modelling the effects of decreasing street trading licence fees, reviewing the wording of discretionary fees and charges, informing the board of parking costs, confirming the national insurance shortfall, piloting single bulky waste collections, and looking into individual licensed fly-tipping collectors.