Haringey's £34m Black Hole: Did Years of Financial Negligence Pave the Way for Crisis?
A Bailout Exhausted and Overspent in Three Months
In February, Haringey Council secured a £37m government bailout, known as Exceptional Financial Support (EFS), to balance its books for the entire 2025/26 financial year. Yet, just three months into the year, a new report reveals the council is already facing a staggering £34.1 million budget deficit over and above that support, which the council does not have funds to cover.
A Q1 financial update presented to the cabinet on 16th September paints a grim picture. Forecast spending on day-to-day services has ballooned to £348.5m against a budget of £314.4m. The report soberly warns there is “a risk” that the assumed £37m of EFS “will not be sufficient”, which seems to be putting it mildly. With the report stating 80% of spending directed at supporting the borough’s most vulnerable residents, the consequences of this financial turmoil are profound.
The Multi-Million Pound Oversight in Housing
While the council points to external pressures like inflation and rising demand, an investigation into its own reports reveals a pattern of serious internal failures. A key example lies in a July 2025 report titled ‘Temporary Accommodation Rent Setting Approach’. It shockingly admits that rents for temporary accommodation properties held in the council’s General Fund were originally set in 2011/12 and had “not been reviewed since 2017.”
For years, as the cost of providing temporary housing soared, it seems the council failed to update the rents it charged. The majority of this rent is covered by central government housing benefits, not the tenants themselves. By not reviewing and increasing these rents annually, a might be expected, Haringey effectively failed to claim millions of pounds of available income from central government each year. Instead, local taxpayers were left to cover the ever-widening gap between the cost of accommodation and the outdated income received for it. The report finally recommends large rent increases and bringing the rent setting policy in line with standard practice, but the financial damage from years of neglect has already been done.
A Pattern of Poor Financial Scrutiny
This oversight is not an isolated incident. The Q1 financial report also confirms a £9.2 million shortfall from undelivered savings targets, indicating a failure to implement its own cost-cutting plans. This follows a critical KPMG audit of the 2023/24 finances, which described the “lack of an effective process for identifying and delivering cost saving programmes”.
The findings give weight to criticisms made earlier in the year. In February, Liberal Democrat group leader Luke Cawley-Harrison accused the administration of being “caught unaware” by financial pressures that had been “coming for a long time.” The evidence suggests the warnings were not heeded.
The Human Cost of Mismanagement
The numbers on a spreadsheet translate into real-world consequences for Haringey’s residents. With a long list of responsibilities to the public, every pound of public money spent by the council counts. The millions lost through administrative failures could have been invested in housing, support for vulnerable adults, road safety, child poverty reduction, or environmental improvements.
As Haringey’s financial situation deteriorates, the council’s narrative of blaming external factors is wearing thin. While no one denies the challenges facing local government, the evidence of self-inflicted financial wounds is hard to deny. The key questions now are: who is being held accountable for these costly errors, and what fundamental changes will be made to ensure basic financial duties are carried out?