Council “on brink of bankruptcy”

Figures published today by the Government confirm that Haringey is set to require £84 million of emergency finance in the coming year, the fourth highest out of 317 councils in England. Only Shropshire, Croydon and Warrington are currently worse.

So-called “Extraordinary Financial Support” (EFS) isn’t actually extra funding; it’s simply permission for the council to borrow money to cover a gap between income and spending. This is a loan which has to be repaid with interest, so will inevitably lead to higher council taxes and cuts to services in future years.

Haringey could become England’s biggest user of EFS within three years: The council’s own Medium Term Financial Plan shows projected reliance rising sharply from £84 million next year to £118 million in 2027-28 and £177 million the year after.

By contrast, Croydon and Warrington’s latest plans show their dependence falling over the same period. On current trajectories, Haringey would overtake both next year and could become England’s largest user of EFS by 2028-29. 

Liberal Democrat Opposition Leader Cllr Luke Cawley-Harrison said “This is not a normal position. It reflects a complete failure by Labour to get a grip of the Council’s finances.”

“Haringey is on the brink of bankruptcy, and Central Government cannot allow emergency borrowing to escalate indefinitely. That leaves only painful choices: higher revenues (potentially including further council tax rises) or significant service reductions.”

A scathing report by auditors KPMG revealed that Haringey had failed to collect millions of pounds owed to it in parking tickets and commercial rent; failed to accurately predict future costs; failed to get value-for-money from contracts; failed to deliver agreed savings, and failed to identify a path to reduced dependence on borrowing to cover day-to-day spending.

Cllr Cawley-Harrison concluded: “Labour councillors must level with residents about how they plan to close this gap, rather than suggesting that Haringey’s position is routine or in line with others. These figures show that Haringey is rapidly becoming the worst-run council in England.”