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Home » London guidance indicates financial crisis on the horizon.
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London guidance indicates financial crisis on the horizon.

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By Susana Mendonça, Political Reporter, BBC London

Harlie and Her Sons: A Family in Temporary Housing

Harlie is still in the process of unpacking as she adjusts to her most recent temporary home in southern London, having moved for the third time in just three weeks. She is uncertain about how long she and her two young sons will be able to stay there.

She expressed that the continual relocations "take a toll on our mental health," voicing concerns about the uncertainty of future accommodations. Harlie and her children are among the increasing number of homeless individuals in London. Local authorities are struggling to find housing for those in need, particularly as some areas fear they could face "financial collapse" without additional governmental support.

The government has indicated plans to shift towards a new funding model for these local services.

Harlie’s situation has been challenging for over a decade. Due to rising private rent costs, she became homeless and now navigates life caring for her two children, ages eight and two. She believes that if they had a stable and secure environment, she could enroll her children in childcare and return to a more normal routine. "The ongoing movements and disruptions are unhealthy for us," she remarked.

Some of the prior accommodations have had issues such as mold and sewage problems. Reflecting on their current placement in Lambeth, her son Frankie said, "I wish we could stay here. I want this to be our forever home."

Currently housed by Croydon Council, a borough that notably declared itself bankrupt in recent years, Harlie’s family faces an uncertain future amid a financial crisis. The council has been tasked with saving £30 million this year alone, with predictions of needing to find an additional £22 million next year.

The Croydon Council spokesperson stated that they are unable to secure permanent housing for families like Harlie’s due to the serious lack of affordable housing in London.

Local councils are legally required to house the homeless, which currently includes over 175,000 individuals living in temporary accommodations. This year, London’s advisers estimate expenditures exceeding £250 million for these services, along with nearly £295 million for adult and children’s social care. This financial strain necessitates significant budgeting adjustments or creative funding methods.

Claire Holland, leading Labor in Lambeth and the London council group, indicated that boroughs are at a "breaking point." She highlighted the dramatic rise in demand, pointing to a housing and public health crisis exacerbated by years of austerity, resulting in the most challenging financial environment for local governments yet.

In efforts to save money, Lambeth has cut back on street cleaning and reclaimed management of internal leisure services, generating around £2 million—minimal against a need to save £70 million over the next four years. Other councils, like Barnet, are opting to manage services like road repairs in-house for better cost control.

In Enfield, facing a £30 million deficit next year, plans are in motion to close eight libraries, though no final decisions have been made. Newly facing a £175 million budget gap, Newham is seeking immediate savings of over £20 million, even opting to forego festive decorations to preserve critical services for vulnerable residents.

As Bromley anticipates a £93.5 million deficit over the next two years, council members warn of necessary cuts across all spending areas. Residents have voiced a desire for increased funding from the central government to support local services.

Bromley’s Conservative leader, Colin Smith, noted that local government financial issues extend beyond mere austerity measures, stressing that outer boroughs, in particular, face dire circumstances. He conveyed concerns that many councils may collapse under financial strain within a few years.

Ray Morgon, from Havering Council, echoed similar sentiments, asserting that without government intervention, the borough could face severe financial limitations, potentially triggering bankruptcy measures that restrict spending to only essential services.

The Ministry of Housing, Communities, and Local Government has stated their commitment to establishing long-term stability through multi-year financing arrangements while striving to work closely with London mayors and boroughs to address these pressing challenges.


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