Conservative councillors have urged the government to provide the £54million loan it gave Havering as a grant.

It has put forward a motion that will be debated at the full council meeting on Wednesday (March 27).

It says: "The chamber calls on the Government to provide the funding as a grant instead of a loan."

The loan, also known as a capitalisation direction, of £54million was approved by Levelling Up Secretary Michael Gove last month to help Havering balance its budgets and prevent it from issuing a Section 114 notice, which would have effectively declared it bankrupt.

The authority had been facing a £32.5m budget gap for 2024/25, rising to £82.2m over four years.

Read More: Havering Council saved from declaring bankruptcy this year

The Local Democracy Reporting Service previously reported it is understood that the council has borrowed the money at a normal interest rate plus one per cent repayable over a 20-year term period.

Calculations suggest that will equate to an interest of £2.13m that will need to be paid by the council over the next two decades.

Havering Conservative leader, Councillor Keith Prince, said they feel that Havering has been “railroaded into taking this loan”.

The Department for Levelling Up has been contacted for comment.