Agenda item

This report sets out the financial forecast for the General Fund revenue budget, the Housing Revenue Account, the Dedicated Schools Grant and the Capital Programme, as at Quarter 2 2025/26.

Councillor Mili Patel (Cabinet Member for Finance & Resources) was invited to introduce the report relating to the Quarter 2 Financial Forecast 2025-26, which provided a detailed update on the Council’s revenue, capital and reserves position. The report also tracked progress against the Medium-Term Financial Strategy and identified the key pressures driving expenditure. It was noted that, despite the financial challenges, Brent remained on course to develop a balanced budget position following the application of the mitigations set out in the report. It was further highlighted that temporary accommodation and adult social care continued to present significant cost pressures but that these were being managed through targeted action plans. Controls on vacancies as they arose were in place, alongside the use of earmarked reserves. External income and grants continued to support the Council’s spending requirements.

 

The Committee were further advised that the Government had announced the National Pride in Place Impact Fund, from which Brent had received £1.5 million. In addition, recent announcements had confirmed capital investment into youth housing and environmental priorities.

 

Having thanked Councillor Mili Patel for introducing the report, the Chair then moved on to invite questions and comments from the Committee in relation to the Quarter 2 Financial Forecast Report 2025-26, with the following comments and issues discussed:

 

• As an initial query, the Chair questioned the implications of approximately 19% of planned savings targets not being achieved and asked what impact this would have on the Council’s overspend position. In response, Rav Jassar (Deputy Director Corporate and Financial Planning) advised that the report set out the savings delivery tracker, noting that four savings within the tracker were marked as amber. It was explained that this represented delays in implementation rather than non-delivery. By way of example, he referred to the in-house children’s care home, which had not yet opened, and confirmed that this matter had previously been discussed at the Scrutiny Committee. It was further stated that services were expected to put forward mitigating actions where delays or implementation issues arose, and these were monitored as part of the budget monitoring process to assess impact. It was acknowledged that, in some cases, delays could result in an impact that extended into the following financial year and created an overspend. In such circumstances, this would be taken into account when updating the Medium Term Financial Strategy. It was confirmed that an assessment of this had been undertaken as part of the savings review and would be factored into the draft budget scheduled for Cabinet consideration next month.

 

• Following on from the previous question, the Chair queried whether there was confidence that the four savings identified in the tracker could be delivered within the current financial year or whether there was concern that any might roll over into the next year. In response, Rav Jassar (Deputy Director Corporate and Financial Planning) confirmed that the narrative in the report indicated delays rather than non-delivery. It was stated that the savings would eventually be implemented, although some issues required resolution and mitigating actions needed to be applied to avoid a negative impact on the overall forecast.

 

• The Chair then sought details on what financial benefit the Council would gain from operating its own residential children’s home. In response, Councillor Grahl (Cabinet Member for Children, Young People & Schools) referred to the committee report, which forecasted an overspend of £2.2 million within the department, the majority of which related to the high cost of residential placements for children in care. It was explained that significant action had been planned for some time, which had resulted in match funding being secured to build an in-house residential children’s centre. The centre was close to completion, although recent barriers had delayed the final stages of opening. It was additionally noted that the Council was working with other local authorities on a project to open a secure residential home for a small number of children requiring secure accommodation, where placement costs were also extremely high. It was confirmed that this project was being delivered at pace.

 

Nigel Chapman (Corporate Director Children Young People and Community Development) further advised that the main financial benefit of the children’s home would be cost avoidance, based on the difference between private sector placement costs and in-house provision. It was confirmed that calculations had been undertaken and the saving applied to the current year’s budget based on the difference in the costs occurred against both private sector placement costs and in-house provision, which had contributed to the overspend position. The two main factors causing delays were outlined, both largely outside the Council’s control. The first related to Ofsted registration, which was required before the home could open. Ofsted had experienced a backlog following the Department for Education’s expansion programme but had assured that registration would be completed by early in the new year. The second factor was an accident in which a neighbour’s car collided with the front of the building, causing significant damage. Surveying work had been completed, and repairs were scheduled for completion by January 2026. The Committee was reassured that every effort was being made to expedite the opening of the home.

 

• Further information regarding the cost of the delay and the mitigation measures being taken was sought by members, including any reduction of services elsewhere. In response, Nigel Chapman (Corporate Director Children Young People and Community Development) explained that the cost of the delay was a pro rata impact on the savings expected this year had the home opened at the start of the financial year. Each month of delay represented a 1/12 reduction in the anticipated saving. In terms of mitigation, it was confirmed that the Council sought to place children in the most suitable accommodation and negotiated with private providers to secure the best possible price. It was noted that the commissioning team adopted a robust approach in negotiations to prevent excessive profiteering, although it was acknowledged that the national undersupply of children’s homes continued to affect market prices.

 

• Members sought details around whether there would be a loss at the end of the financial year that would need to be funded from reserves. In response, Councillor Grahl (Cabinet Member for Children, Young People & Schools) advised that the original projection for savings was £400,000 per year, equating to approximately 1/12 of that amount per month. It was further explained that it was difficult to predict the precise impact because the number of children requiring residential care was relatively small, with the majority of children in care placed in foster homes. It was additionally noted that the cost of residential placements varied significantly depending on individual needs, with some placements costing upwards of £10,000 per week. It was confirmed that the high cost of residential placements continued to exert pressure on the Council’s finances and was the primary factor contributing to the overspend of £2.2 million within the department.

 

• As an additional issue, the Chair observed that, historically, overspends within adult social care had not been identified until later in the financial year. It was acknowledged that monitoring and tracking of savings appeared to have improved and questions were raised around what the primary concerns were for the directorate at the current time. Councillor Nerva (Cabinet Member for Adult Social Care, Public Health and Leisure) stated that the primary concern was the winter period, which represented the most challenging time of year for adult social care services and the NHS nationally. The importance of ensuring that systems operated effectively to avoid unplanned care, particularly unplanned institutional care such as hospital admissions or residential placements was emphasised. It was confirmed that a paper would be presented to the Health and Wellbeing Board later in the month, setting out local investment to reduce unplanned care and promote independence and early intervention. It was also reported that significant work was underway to improve the resident experience and ensure that customer services worked closely with adult social care to provide early advice. The risks relating to savings anticipated for 2025-26 were acknowledged, which were taking longer to deliver than expected. It was further noted that financial resources for service development and commissioning were limited and the impact of the insolvency of a major provider of community equipment which had affected Brent and 2/3 of London boroughs was highlighted. It was additionally explained that this had been a critical issue for adult social care and the NHS locally, as the provision of equipment was essential for successful hospital discharge and prevention of admission.

 

• The Chair questioned at what point delays in commissioning new arrangements would become a serious financial risk given the overall adult social care budget. In response, Rachel Crossley (Corporate Director Service Reform and Strategy) conveyed that expenditure on equipment was jointly funded with health partners, with approximately 60-70% funded by health and the remainder by the local authority. It was confirmed that negotiations were ongoing regarding the funding split and that interim arrangements had been in place following the insolvency of the previous provider. It was reported that a new provider had been secured through a consortium of 8 boroughs and that agreement with the NHS on funding had been escalated to the Chief Executive of the Integrated Care Board. It was additionally stated that the cost of £500,000 related to the period during which alternative providers were used while payments continued under the previous contract. Confidence was expressed that this figure was sufficient and confirmed that the new contract would commence once funding arrangements were agreed.

 

• The Chair raised queries around the cost implications for the Council of insufficient discharge arrangements and disputes with the NHS over discharge, and why this was such a priority. In response, Councillor Nerva (Cabinet Member for Adult Social Care, Public Health and Leisure) emphasised that delays in discharge had a detrimental impact on residents and created significant pressure on the local authority. It was noted that disputes sometimes arose between families, carers, the local authority and hospitals regarding readiness for discharge. It was further explained that delays prevented new admissions to hospital and required the local authority to provide intensive support to individuals who should have been receiving medical treatment to improve their health and independence.

 

• As a further issue highlighted, the Chair questioned what financial pressure had been created for the Council by the need to provide intensive support for residents discharged too early during the first two financial quarters. In response, Rachel Crossley (Corporate Director Service Reform and Strategy) reported that there were two main aspects to the financial impact. It was explained that reablement and support services were largely funded through the Better Care Fund and general funds, although some local authority funding was involved. It was confirmed that the greatest financial pressure related to short-term placements, which were traditionally intended to last eight weeks but, in some cases, had extended significantly longer. It was also noted that this was partly a practice issue requiring improved review and follow-up and partly due to difficulties in securing placements for certain groups. It was further reported that short-term placements were costing approximately £4.5 million per year. While some of this had been budgeted for, the figure needed to be managed. The importance of moving individuals out of short-term placements either to their own homes with support or into permanent placements, as short-term arrangements were typically more expensive than long-term placements, was emphasised. It was confirmed that approximately 50 cases had been identified for targeted action to reduce costs.

 

• The Chair sought clarification on the adequacy of resources to deliver the required outcomes to relieve the significant financial pressure in relation to short-term placements. In response, Rachel Crossley (Corporate Director Service Reform and Strategy) informed that the approach was centred on prioritisation. Weekly meetings were being held to review relevant figures. It was confirmed that she and Minesh Patel (Corporate Director Finance and Resources), were conducting sessions with Heads of Service. It was noted that additional resources were not necessarily required; rather, emphasis was placed on the effective use of data management and consideration of placement strategies. It was highlighted that there remained capacity within dementia services and for providers willing to accept complex cases. Further work was required with providers in relation to Care Quality Commission (CQC) registration for specific placements, as providers were exercising discretion in accepting cases. It was stressed that complex cases were associated with significantly higher costs.

 

• The Chair queried the anticipated timeframe for outputs arising from provider renegotiations. In response, Rachel Crossley (Corporate Director Service Reform and Strategy) advised that negotiations with providers for the 2026-27 period would commence shortly. Challenges due to inflation and National Insurance costs impacting the cost of care model were acknowledged. Benchmarking indicated that placement costs compared favourably with neighbouring authorities. In respect of short-term placements, improvements had already been observed, with individuals moving through the system more quickly. No placement was now permitted without an agreed end date and a scheduled review, which had strengthened controls.

 

• The Chair sought details around whether the impact of mitigation measures could be identified in the next quarterly report or whether this was more likely to be evident in the April 2026 report. In response, Rachel Crossley (Corporate Director Service Reform and Strategy) stated that winter pressures and other factors around placements remained uncertain; however, the relevant placement cohort and associated budget were being tracked closely through the dashboard. The Chair suggested that the Quarter 3 report should include an assessment of the impact of high-cost placements on the budget and expenditure.

 

• Members sought clarification on the spending controls currently in place and requested evidence of measurable results demonstrating their impact on the budget. In response, Rav Jassar (Deputy Director Corporate and Financial Planning) confirmed that spending controls had been implemented since 2023 and had mitigated overspend in the last two financial years. Enhancements introduced this year included additional sign-off requirements for non-standard staff payments, such as overtime and honorariums, which now required approval by a Head of Service, a Director, and a Corporate Director. Recruitment requests continued to require Corporate Director approval, and rejected requests were now recorded to monitor effectiveness. Agency expenditure had reduced significantly in both numbers and overall cost. Reviews by the Council Management Team (CMT) were now more frequent. It was emphasised that incremental reductions collectively had a substantial impact. Senior managers had been briefed through a dedicated meeting to ensure consistent understanding. Estimated cost avoidance was approximately £8 million in the last financial year and just under £4 million in the previous year. Quarter 2 estimates were not yet available but would be reflected in future reports.

 

Minesh Patel (Corporate Director Finance and Resources) further added that the Council delivered over 700 services through numerous staff, making rigorous controls essential. He stressed the importance of maintaining discipline under pressure and noted that additional layers of approval, while sometimes perceived as bureaucratic, were beneficial in ensuring value for money. Incremental changes were key to achieving overall financial control.

 

• Highlighted concerns regarding risks arising from the Fair Funding Review led to queries around the potential impact on future budgets, the need for further tightening of spending controls, and key risks if funding requirements were not met. In response, Minesh Patel (Corporate Director Finance and Resources) reported that the Government had committed to a multi-year settlement, which would assist planning by providing clarity on the funding envelope for the next three years. However, the anticipated announcement had been delayed until after the national budget. It was further noted that all local authorities would need to reconsider service delivery models to ensure statutory obligations were met within available resources. Once the funding envelope was confirmed, the Council would need to determine how to deliver services sustainably. Failure to do so could result in Section 114 notices and Exceptional Financial Support situations, which were recognised as unsustainable and difficult to recover from.

 

• The Chair enquired regarding the likelihood of receiving a funding settlement at the end of December 2025 or the beginning of January 2026. In response, Minesh Patel (Corporate Director Finance and Resources) indicated that all projections were based on assumptions and stated that the Government had committed to a transition period following the Fair Funding Reform, with full implications expected to take effect in 2027-28. It was confirmed that interim arrangements would allow the Council to continue operating with either slightly reduced or slightly increased funding during the transition. Members were advised that the settlement was now expected to be delivered in the week preceding Christmas, consistent with previous years. The importance of having a draft budget and engaging in discussions at this stage was emphasised, as this would provide an opportunity to make adjustments if required. It was also noted that the final budget would not be presented to Full Council until February 2026, allowing scope for further amendments should significant discrepancies arise. The Chair additionally confirmed that the matter would be examined in detail by the Budget Scrutiny Task Group, which would report back to the Committee in January 2026.

 

• Clarification was sought around whether the reduction in agency expenditure was attributable to improved recruitment practices or to more effective negotiation of agency rates. In response, Rav Jassar (Deputy Director Corporate and Financial Planning) clarified that the reduction was due to a combination of factors and highlighted that enhanced oversight, increased rigour, and greater challenge regarding agency usage had contributed significantly. Particular attention had been given to high-cost and long-term usage of agency staff, resulting in reduced overall costs by implementing stricter controls and oversight to these cases.

 

• Members observed that six organisations had received business rates relief and sought clarification on the decision-making process and applicable criteria. In response, Rav Jassar (Deputy Director Corporate and Financial Planning) explained that the organisations listed in the committee report were entitled to mandatory relief of 80% under existing national regulations. It was clarified that this entitlement was determined by central government rather than by the Council. The discretionary element related to the remaining 20% of the bill and was subject to criteria published on the Council’s website. The Committee heard that there were nine criteria, which included requirements for the organisation to be a charity, a non-profit entity, a voluntary organisation, or organisations such as a local sports club. Applications meeting these criteria were submitted for Cabinet approval annually. It was further confirmed that checks were undertaken each year to ensure continued compliance, including verification of charity registration with the Charity Commission.

 

• Details were sought on whether the community impact of organisations receiving discretionary relief was monitored on an ongoing basis. In response, Rav Jassar (Deputy Director Corporate and Financial Planning) confirmed that compliance checks were conducted annually and that one of the criteria for discretionary relief was demonstrable impact on the community.

 

• The Chair summarised supplementary questions raised and observed that all councils had experienced significant reductions in base funding over the past 14 years, which had adversely affected service delivery, increased staff workloads, and extended waiting times. The Chair noted that the report outlined mitigations being implemented by the Council, as well as associated risks, including potential impacts on reserves arising from overspends in areas such as children’s placements and hospital discharge placements. The Chair emphasised that these financial risks were real and that mitigations were essential. It was confirmed that the Budget Task Group would continue to examine the implications for service delivery and that councillors would have the opportunity to express their views on proposed measures and their potential impact. In citing an example relating to delays in processing council tax arrears and repayments, the Chair requested clarification on the experience of the Council Tax team and the impact of financial constraints on service delivery. In response, Tom Cattermole (Corporate Director Residents and Housing Services) provided reassurance that there were currently no vacancies within the Community Hubs teams and that no cuts had been made to these teams. It was confirmed that the teams were fully staffed, subject to occasional vacancies arising from staff turnover. In relation to the Council Tax team, it was acknowledged that efficiencies had been introduced over time. Members were advised that additional resources had recently been allocated to manage changes to the Council Tax Support Scheme introduced in the previous year, in response to increased demand for support and invited members of the Committee to share examples of any specific issues for further review.

 

• Members raised queries regarding the significant overspend in adult social care and questioned whether any restructuring of service delivery was anticipated. In response, Councillor Nerva (Cabinet Member for Adult Social Care, Public Health and Leisure) informed that adult social care was eligibility-led and delivered in accordance with the Care Act (2014), which provided clear statutory criteria for all local authorities. It was noted that funding was finite and that Brent, along with other authorities, had been engaged for several years in efforts to transform adult social care. The principal challenge was balancing investment in prevention with the statutory obligation to meet eligible care needs. Councillor Nerva emphasised the importance of partnership working with the NHS and advocated for a one public purse approach. It was observed that successive governments had failed to implement a sustainable settlement for adult social care and stressed that the need for such reform was now critical.

 

• The Chair referred to recommendations made at previous committee meetings regarding shared budgets for health and social care and questioned whether there was any indication from the Casey Review or other plans of a move towards a one public purse approach. In response, Rachel Crossley (Corporate Director Service Reform and Strategy) reported that discussions had taken place regarding neighbourhood health initiatives and the Better Care Fund, including to split the fund and apply similar mechanisms. However, no detailed plans had been established. Concern was expressed that reallocating existing funding could impact the Council’s ability to support hospital discharge and community care. It was confirmed that positive discussions had recently been held with the new Chief Executive of the Integrated Care Board regarding adopting a total place approach and greater financial transparency.

 

• Members observed that council tax collections had decreased compared to the previous two years and requested information on actions taken to address this. In response, Tom Cattermole (Corporate Director Residents and Housing Services) advised that a Council Tax Improvement Plan had been developed, incorporating short-term, medium-term, and long-term measures. Short-term actions included targeted campaigns using automated tools such as SMS to prompt payment of debts under £1,000, increased use of ethical enforcement agents for debt recovery, and resource reallocation. Medium-term measures focused on digital transformation, including the introduction of online contact forms and redesigning the customer journey to reduce reliance on telephone contact. It was acknowledged that call waiting times were currently high due to increased demand following changes to the Council Tax Support Scheme, which required some residents to pay 35% council tax for the first time. Communications had been improved using behavioural insights to make letters and scripts more effective. Long-term objectives included enabling customers to self-serve online and writing off unrecoverable low-level debts. It was confirmed that the aim was to meet the current year’s collection target and build on this in subsequent years.

 

• Following on from the previous question, members questioned whether the long-term target of approximately 97% council tax collection was achievable and expressed concern that failure to meet this target could lead to medium-term financial pressures. In response, Tom Cattermole (Corporate Director Residents and Housing Services) further advised that the new council tax scheme would require ongoing review and confirmed that targets would be reassessed based on end-of-year performance data.

 

• The Chair expressed concern that the Committee had not yet received evidence or data demonstrating the analysis of the population that was not paying council tax, specifically distinguishing between those unable to pay (the ‘can’t pay’ group) and those unwilling to pay (the ‘won’t pay’ group). The Chair emphasised the importance of targeting measures at those unwilling to pay, while recognising that if the proportion of residents unable to pay was significant, achieving the 97% council tax collection target might not be feasible given the level of deprivation in the borough. The Chair questioned what progress had been made in understanding this breakdown and whether the 97% council tax collection target remained achievable. In response, Tom Cattermole (Corporate Director Residents and Housing Services) explained that the council tax collection target was aspirational and confirmed that the campaigns outlined in his earlier response were aimed at customers unwilling to pay, while those unable to pay were encouraged to visit a community hub or contact the Council by telephone. It was noted that support was available through discretionary council tax reduction payments, such as the Council Tax Hardship Fund. The Committee were advised that further automation would be introduced once the automation plan was complete, ideally within the next 12 months.

 

• With reference to the forecast overspend of £4 million in Residents and Housing Services, members questioned how confident the department was that the in-year mitigation measures outlined in the report, including i4B, the Private Rented Sector (PRS) partnership, supply expansion initiatives, and leasing, were realistic and achievable. In response, Lawrence Coaker (Director Housing Needs and Support) explained that the primary drivers of homelessness were the contraction of the private rented sector and evictions from that sector, followed by exclusions from family, friends, and parents. It was stated that the Council was focusing on early intervention, particularly in cases of family and parental exclusions, as these were more amenable to prevention than private rented sector evictions, which were often the result of landlords exiting the market. It was additionally noted that this trend was influenced by rising mortgage rates, interest rates, capital gains tax implications, and the forthcoming Renters Rights Act 2025, which had recently received Royal Assent and would come into effect in stages from January 2026. The most significant provision, the abolition of Section 21 no-fault evictions, was not expected to take effect until April or May 2026, meaning there would be no impact before the next financial year. The Council’s work with voluntary sector organisations and community groups, including recent events around homelessness FAQs and internal collaboration with adult social care and children’s services, as part of a whole-council approach to tackling homelessness, was further highlighted.

 

• As a further query, members drew attention to the report’s comments on acquisitions for temporary accommodation through the Local Authority Housing Fund (LAHF), the Council Homes Acquisition Programme (CHAP), leasing arrangements, and i4B holdings, and questioned what was meant by the statement that few opportunities had met the Council’s affordability criteria. In response, Lawrence Coaker (Director Housing Needs and Support) explained that the issue largely related to the structure of leasing deals proposed by developers and providers. Some providers sought lease terms of up to 40 years, which the Council would not accept. Concerns regarding Consumer Price Index (CPI) rent increases, which would raise the Council’s liabilities annually while income remained tied to Local Housing Allowance rates, which did not increase at the same pace. This widening gap made such arrangements financially unviable.

 

• Following up, members questioned whether further funding could be secured through the LAHF and CHAP programmes to provide temporary accommodation within the borough and reduce reliance on costly bed and breakfast placements outside London. In response, Amanda Healy (Deputy Director Investment and Infrastructure) highlighted that under the LAHF programme, the Council had not been able to specify the level of funding sought, as allocations were determined centrally. It was confirmed that Brent had received a comparatively significant allocation and had expressed interest in future rounds, although details of the allocation process were awaited. Regarding the CHAP programme, it was explained that this was a rolling programme with the Greater London Authority (GLA) and that opportunities were assessed for financial viability, including whether they offered cost avoidance or reduced long-term expenditure. It was further noted that challenges remained with lease options, as projected costs did not align with expected Local Housing Allowance (LHA) rates, creating significant financial risk. It was confirmed that current efforts focused on identifying arrangements that provided the greatest benefit, which at present were limited to cost avoidance rather than achieving a break-even position.

 

• As a separate issue highlighted, members queried whether any actions were currently being undertaken to address challenges within resident and housing services, particularly in relation to homelessness and the Housing Revenue Account (HRA). In response, Tom Cattermole (Corporate Director Residents and Housing Services) reported that the HRA was precariously balanced. An analysis had been undertaken, and two key approaches had been identified: increasing income collection, similar to council tax, and improving void management to avoid costs associated with vacant properties. Significant work had already been carried out to reduce income loss from void properties, which also reduced council tax payments for which the housing department was responsible. These two areas had been prioritised over the past six months and would remain a focus for the coming year. Lawrence Coaker (Director Housing Needs and Support) further explained that the main drivers of homelessness were private rented sector evictions and exclusions by family, friends or parents. Other contributing factors included poor quality accommodation, overcrowding and domestic abuse. The Renters’ Rights Act 2025 was expected to address no-fault evictions and introduce new statutory duties for private housing services to enforce standards and tackle disrepair. Overcrowding remained a significant challenge due to the lack of large, affordable properties with a dedicated team team to support victims of domestic abuse. Whilst Brent’s strong reputation for support had led to advocates directing victims to the borough, discussions were ongoing with advocates and London-wide partners to ensure shared responsibility for domestic abuse services.

 

• Members noted the substantial contribution of i4B in reducing temporary accommodation pressures and questioned whether any financial flexibility could be applied to enable i4B to relax its acquisition criteria and purchase more properties. In response, Amanda Healy (Deputy Director Investment and Infrastructure) explained that the council benefited from cost avoidance through reduced overspend, which mitigated the need for additional reserves or wider measures. However, as i4B was a separate legal entity, the council could not intervene financially beyond existing arrangements. The company needed to break even, and interactions between the council and i4B were subject to state aid rules. Loan arrangements had been confirmed as compliant, but strict rules limited what could be done to support the company financially.

 

• With reference to paragraph 8.21 of the committee report, which highlighted i4B’s role in reducing temporary accommodation costs and expanding housing supply, members questioned how the council ensured that resident experience in i4B-managed homes was consistent with council-managed properties, particularly regarding repairs, communication and accountability. In response, Tom Cattermole (Corporate Director Residents and Housing Services) confirmed that any i4B property within Brent was managed in the same way as a council property. Different arrangements applied to properties outside Brent, but residents in Brent could expect equivalent services.

 

• Members highlighted that the loss of affordable private rented housing and landlords leaving the market were key drivers of temporary accommodation overspends. In light of recent changes to affordable housing targets for London, members queried what assessment had been made of the impact of shrinking supply and how acquisition and development programmes were being adapted. In response, Lawrence Coaker (Director Housing Needs and Support) stated that Brent was involved in work led by London Councils to scrutinise the contraction of the private rented sector. A report commissioned from Savills confirmed that most properties leaving the private rented market were being purchased by homeowners for personal occupation. This resulted in the permanent loss of units available for private rent, reducing the overall supply of accommodation.

 

• Members were keen to seek details regarding the reason for the significant decrease in supported exempt accommodation expenditure from £4 million to £1.8 million. In response, Lawrence Coaker (Director Housing Needs and Support) informed that the reduction was the result of a two-pronged approach. Firstly, the Council had adopted a more robust process for assessing new providers entering the market. Applications were scrutinised by the Benefits team to ensure compliance with the criteria for supported exempt status. Secondly, the Council reviewed whether individuals placed in such accommodation genuinely required the level of support offered, as there had been instances where accommodation was used primarily to address homelessness for those who did not always require the supported element. In addition, the Council had engaged with providers incurring the highest subsidy costs to broker arrangements with housing associations. Where providers partnered with housing associations or became registered providers (RPs) themselves, the financial responsibility for subsidy shifted from the local authority to the Department for Work and Pensions. This approach not only mitigated subsidy loss for Brent Council but also improved the quality of care and support.

 

• Members queried whether any exploitative landlords had been identified. In response, Lawrence Coaker (Director Housing Needs and Support) confirmed that the Council had identified providers whose level of support was deemed inadequate. The Council had ceased referrals to these providers and entered negotiations to improve support standards or alter their operating model. In some cases, properties were converted into Houses in Multiple Occupation (HMOs) or privately rented accommodation, thereby increasing supply for single homeless individuals who did not require support. This dual approach aimed to enhance accommodation quality for those in need while optimising housing availability.

 

• Members requested information on the implications of the recent announcement regarding the new build of social housing properties and its impact on affordable housing availability over the next four years. Clarification was sought on the extent to which the Council had forecast and prepared for this outcome. In response, Tom Cattermole (Corporate Director Residents and Housing Services) undertook to raise the matter with Jehan Weerasinghe (Corporate Director Neighbourhoods and Regeneration) and noted that 892 homes were scheduled to come online within the current year under the Housing Revenue Account (HRA).

 

• Details were sought around which actions within the High Needs Block Deficit Recovery Management Plan were expected to deliver a tangible reduction in the current financial year. In response, Councillor Grahl (Cabinet Member for Children, Young People & Schools) stated that the principal financial pressure related to the cost of Special Educational Needs and Disabilities (SEND) provision. Demand for Education, Health and Care Plans (EHCPs) had risen steadily for over a decade, increasing by approximately 10% annually. The Council’s previous SEND strategy included a capital investment programme to create over 400 new specialist placements within the borough, aimed at improving support and reducing the deficit. However, demand continued to grow, necessitating further investment in specialist placements and additional resource provision within mainstream schools. Nigel Chapman (Corporate Director Children Young People and Community Development) further added that a government White Paper on SEND reform had been delayed until after Christmas. It was acknowledged that the SEND system was widely recognised as unsustainable. While Brent had succeeded in slowing the growth of EHCPs compared to national averages, the financial pressure persisted. Each EHCP incurred an additional cost of £10,000 to £15,000 per child, compared to £6,000 for a child without an EHCP. Current measures focused on tightening assessment processes, ensuring eligibility criteria were rigorously applied, and reducing support where appropriate within plans. A further priority was to expand local capacity, to reduce the placement of children in out-of-borough independent special schools, which significantly increased costs. The forthcoming School Place Planning Strategy Refresh, scheduled for Cabinet consideration next week (at the time of writing), would outline proposals for additional specialist placements. Collaborative work with other boroughs was also being explored to address challenges around the sufficiency of school places.

 

• Clarification was sought around what early intervention measures were currently in place to moderate the influx of need for school places and whether any additional actions were being taken to address increasing demand later in life. In response, Nigel Chapman (Corporate Director Children Young People and Community Development) reported that Brent had participated in the Department for Education’s (DfE’s) Delivering Better Value programme, which supported approximately half of local authorities nationally. Brent had been subject to a lower level of intervention within that programme. One of the funded projects was titled Intervention First, which focused on early years and the first two years of primary education. This initiative was introduced in response to a notable increase in children presenting with speech and language difficulties, some of which were attributed to the impact of the pandemic and reduced socialisation. Members heard that a dedicated team had been established and deployed across several Harlesden primary schools to provide targeted support. The intervention had demonstrated positive outcomes, including the identification of cases where presenting issues were linked to trauma rather than learning needs. Addressing these underlying issues had enabled children to manage better in school, reduce behavioural challenges and avoid escalation to an Education, Health and Care Plan (EHCP). Evidence had indicated that the model was effective, and the Department for Education had expressed interest in its outcomes. The Council aimed to expand the programme, subject to investment, and was exploring the use of the High Needs Block to sustain and extend provision across the borough.

 

• The Chair questioned whether the Intervention First programme had been delivered partly through the Wellbeing and Emotional Support Team (WEST). In response, Nigel Chapman (Corporate Director Children Young People and Community Development) clarified that some elements had been delivered through WEST and others through educational psychologists. It was noted that future arrangements would involve funding through the High Needs Block rather than the General Fund.

 

The Chair further queried whether the WEST team was being disbanded. In response, Nigel Chapman (Corporate Director Children Young People and Community Development) advised that the service would continue in some form but would be subject to a retendering process in the new year. The Dedicated Schools Grant (DSG) would continue to support the needs of children in schools, and the intention was to maintain continuity between the conclusion of the current contract and the commencement of a new provider. Savings requirements had been identified within the General Fund, and discussions were ongoing with health partners to bridge funding gaps.

 

• The Chair raised questions around the discussions with other local authorities regarding the development of a joint school offer to reduce reliance on costly independent placements and sought an indication of likely success and timeframes. In response, Nigel Chapman (Corporate Director Children Young People and Community Development) explained of the challenges in establishing new schools due to the introduction of academies and free schools. However, the Children's Wellbeing and Schools Bill 2024 presented an opportunity for local authorities to assume a greater role in planning provision. Brent was working with neighbouring boroughs, including Ealing, Barnet and Harrow, to assess collective needs and develop a strategic approach. It was further mentioned that land availability remained a significant constraint, but collaboration aimed to ensure more efficient planning. In the short term, efforts would focus on cost avoidance, projected at approximately £2 million, through measures such as ceasing unnecessary plans, reducing support where appropriate and preventing the emergence of new plans.

 

• The Chair questioned whether a timeframe of 3 to 5 years for establishing a new school was realistic. In response, Nigel Chapman (Corporate Director Children Young People and Community Development) confirmed that Wembley Manor School had been delivered relatively quickly, with construction completed within 3 years of the decision to proceed. Advances in modular building techniques had accelerated delivery, although securing land and planning permission remained the most significant challenges.

 

• Details were sought by members on which locations within Brent were being considered for potential new school sites. In response, Nigel Chapman (Corporate Director Children Young People and Community Development) advised that the upcoming Planning Strategy Refresh would provide further detail. Current considerations focused primarily on sites with spare capacity within the primary school sector, as certain areas of the borough had experienced a reduction in primary school enrolments. This created opportunities to utilise existing space within primary schools. It was further mentioned that the availability of new land for school development was extremely limited. While one or two sites alternative sites existed, the principal approach would involve maximising capacity within the existing primary sector.

 

• Reference was made to the detail provided within the committee report, which stated that Bridge Park Community Leisure Centre had closed with an overspend of £0.25 million, and that Willesden Sports Centre continued to face financial pressures with a forecast assuming a full drawdown of the £0.4 million reserve. Members queried why the table on page 66 of the report reflected an overspend of £0.2 million and requested clarification of the figures. In response, Rachel Crossley (Corporate Director Service Reform and Strategy) explained that the £0.2 million figure related to Bridge Park. The budget had assumed closure in April 2025; however, the centre remained operational until July 2025 due to an extended consultation period. No operating budget had been allocated for Bridge Park for the current year, but costs were incurred during the first quarter, which accounted for the overspend shown in the table. It was also confirmed that the reserve for Willesden Sports Centre ensured a break-even position, which was why it did not appear in the table, although financial pressures were expected to continue into the next year.

 

This raised related questions around whether the loss forecast for Willesden Sports Centre was excluded from the forecast because it was covered by reserves. In response, Rachel Crossley (Corporate Director Service Reform and Strategy) clarified that the reserve had been applied to mitigate the gap under the terms of the Private Finance Initiative (PFI) contract. Rav Jassar (Deputy Director Corporate and Financial Planning) further added that the forecast reflected the position after the use of reserves. While there was an underlying pressure, this had been offset for the current financial year, and the £0.2 million figure related solely to Bridge Park.

 

• Members observed that part of the financial pressure appeared to result from energy cost volatility and questioned to what extent engagement had taken place with the Climate Action Team to explore solutions such as installing solar panels on leisure centres. Members noted that funding was available from Swim England and potentially other sources to reduce emissions and mitigate utility cost volatility. In response, Rachel Crossley (Corporate Director Service Reform and Strategy) confirmed that solar panels were being installed at both Willesden and Vale Farm Leisure Centres. The Council was working closely with the Property Team and the Climate Change Team and had secured grants to support these installations.

 

Following up, members requested information on the projected cost savings arising from these measures. In response, Rachel Crossley (Corporate Director Service Reform and Strategy) undertook to review available data and provide this information following the meeting.

 

• Members noted an overspend of £2.6 million on the Housing Revenue Account (HRA) as at Quarter 2 and questioned whether this was attributable to performance in relation to rent collection and void management. In response, Tom Cattermole (Corporate Director Residents and Housing Services) stated that historical factors, including rent-setting practices and investment in housing stock, had contributed to the position. A comprehensive review of the HRA and its finances was underway to identify measures to restore financial stability. The Chair confirmed that a paper on the HRA was scheduled to be presented to the Committee in February 2026.

 

• Members queried the risks associated with the new repairs contracts and questioned what steps were being taken to mitigate these risks. In response, Tom Cattermole (Corporate Director Residents and Housing Services) acknowledged that rising repair costs represented a significant risk. The Council intended to strengthen contract management processes, including closer oversight of contractors such as Wates and Mears. These measures aimed to prevent cost escalation throughout the year. It was also noted that this issue had been discussed at the Committee’s July 2025 meeting when Wates attended.

 

• Members observed that the Council’s HRA reserves were relatively low compared to other local authorities and questioned what steps were being taken to increase reserves to manage unforeseen pressures. In response, Tom Cattermole (Corporate Director Residents and Housing Services) confirmed that the Council recognised the need to bolster reserves. Actions currently being implemented were expected to support reserve growth and inform the development of an improved HRA business plan, which would be presented to the Committee in February 2026.

 

In seeking to bring consideration of the item to a close, the Chair thanked officers and members for their contributions towards scrutiny of the Quarter 2 Financial Forecast Report 2025/26. As a result of the outcome of the discussion, the following information requests and suggestions for improvement identified were AGREED:

 

INFORMATION REQUESTS

 

(1)  Provide the percentage of those struggling to pay Council Tax Rates due to financial hardship and the percentage evading or refusing payment.

 

(2)  Provide a scenario-based assessment of the estimated financial impact of temporary CIL relief and the reduction in the affordable housing threshold (from 35% to 20%) on Brent’s council finances over the next three years, including key assumptions, risks, and implications for affordable housing availability.

 

(3)  Provide additional details on the strategy and approach for reducing costs related to short-term placements.

 

(4)  Provide estimated cost savings from any existing and/or planned climate initiatives at Willesden Sports Centre and Vale Farm.

 

SUGGESTIONS FOR IMPROVEMENT

 

(1)  Work with the NHS to establish additional shared or pooled budgets for Adult Social Care, with the aim of reducing financial pressures, improving resource efficiency, enhancing coordinated planning, and delivering a fully integrated health and social care offer across the borough.

 

(2)  Prioritise effective void management to reduce forecasted Housing Revenue Account (HRA) budget pressures and ensure the long-term financial sustainability of the HRA.

 

(3)  Assess the opportunities, as they may present themselves, in the Children’s Wellbeing and Schools Bill, to establish additional Community Special School capacity, and to work collaboratively with neighbouring local authorities to help alleviate Dedicated Schools Grant pressures.

 

(4)  Conduct a comprehensive review of HRA finances to address forecasted budget pressures and ensure long-term sustainability, with findings reported to the Committee at its February 2026 meeting. The review should examine the HRA’s purpose, funding sources, performance, key pressures, risks, and mitigation measures, including an in-depth analysis of void management and income generation.

 

Please note that the specific wording of the suggestions for improvement was subject to refinement following the meeting, with the agreement of the Chair.