Issue - meetings

This report sets out the overall financial position facing the Council and highlights the significant risks, issues and uncertainties with regards to the Council’s Medium Term Financial Strategy (MTFS). It also sets out the proposed budget setting strategy for 2026-27.

Cabinet RESOLVED to:

(1)       Note the contents of the report and the potential financial impact on the Council’s Medium Term Financial Strategy.

(2)       Note the summary of the Spending Review and Local Government Funding reform consultations, as set out in section five of the report.

(3)       Agree the budget setting process for 2026/27, including the approach to consultation and scrutiny, as set out in section seven of the report.

(4)       Note and agree the proposed 2024/25 capital budget carry forwards and capital virements for 2025/26 as set out in section eight of the report.

(5)       Note the financial position with regards to the Housing Revenue Account, as set out in section nine of this report; and

(6)       Note the financial position with regards to Schools and the Dedicated Schools Grant, as set out in section ten of the report.

Eligible for call-in: Yes

Deadline for submission of call-in: 6pm on Monday 4 August 25

In Councillor Mili Patel’s absence (as Deputy Leader and Cabinet Member for Finance & Resources) Councillor Muhammed Butt (as Leader of the Council) introduced a report from the Corporate Director Finance & Resources which set out the overall financial position facing the Council and highlighted the significant risks, issues and uncertainties with regard to the Council’s Medium Term Financial Strategy (MTFS). The report also set out the proposed budget setting strategy for 2026-27, which included the proposed consultation with residents, businesses and other key stakeholders.

In presenting the report, Councillor Muhammed Butt highlighted the challenging financial environment in which the Council was operating as a result of the cost-of-living crisis and legacy of increasing inflation impacting not only on household budgets but also service demand and on the Council’s overall financial resilience.  In recognising the reality of these ongoing pressures, the report had identified a resulting budget gap of £30m as needing to be addressed over the next three year period, which members were advised would require difficult choices, innovation as well as discipline to be able to deliver supported through the Embrace Change programme in seeking to transform how the Council delivered services, supported residents and managed resources to meet the challenges identified.

As part of the planning process, Members noted the potential for significant ongoing spending pressures in relation to demand-led services with specific reference to the 7% increase in number of adult social care service users and associated increase in weekly costs as well as the increase in number of children in residential care, with the cost of a single high needs placement noted as exceeding £500,000 annually. In terms of housing, the Council was also continuing to address the pressures created through rising demand, declining supply and escalating costs, with the average private rent in London having risen by 8.4% in the last year, and the number of households in temporary accommodation continuing to grow.

In seeking to move forward, Councillor Muhammed Butt felt it was important to recognise the focus and action outlined within the Medium-Term Financial Plan to assist in mitigating against the challenges identified.  This had included the Housing Needs and Support budget being increased by £14m, alongside investment in additional housing supply through i4B and the Local Authority Housing Fund, while implementing a new model of resident support, underpinned by £1 million of recurring funding.  Despite these measures, however, it was pointed out that the Council would not be able to meet the challenges identified alone and whilst. welcoming the government’s commitment to a multi-year funding settlement and announcements in the Fair Funding Review, members stressed their ongoing support in relation to the need for fundamental reform of the local government funding regime to provide a more sustainable basis for the ongoing provision and delivery of services.

In considering the report, concern was expressed at the substantial nature of the ongoing financial challenges outlined during presentation of the report given the impact on the Council’s budget and potential need to deliver additional savings.  Highlighting  ...  view the full minutes text for item 10