Agenda item

This report presents the 2025/26 financial outturn for the General Fund, the Housing Revenue Account, the Dedicated Schools Grant and the capital programme.

Cabinet RESOLVED:

(1)  To note the financial outturn for 2025-26.

Eligible for call-in: Yes

Deadline for submission of call-in: 6pm on Monday 3 August 2026.

Councillor Grahl (Deputy Leader and Cabinet Member for Finance and Resources) introduced a report from the Corporate Director Finance and Resources presenting the 2025-26 financial outturn for the General Fund, Housing Revenue Account (HRA), Dedicated Schools Grant (DSG) and the capital programme.

In presenting the report, Councillor Grahl began by highlighting, as part of her new Finance & Resources portfolio, the significant challenges Brent Council and other local authorities were facing in relation to unprecedented funding pressures, high inflation, rising demand for essential services, in particular Adult Social Care, and the ongoing housing crisis affecting residents.

In outlining the 2025-26 year-end position, she confirmed that the Council ended the previous financial year with a general fund overspend of £18.3m which had been met from reserves specifically set aside to manage financial pressures, a Dedicated Schools Grant deficit recorded at £6.6m, and a break-even HRA position. She advised that this came during another demanding year in which the Council had been required to deliver £20.4m of cuts whilst protecting essential services and responding to increasing demand, which she felt reinforced the need for stronger financial control, better forecasting and the full delivery of agreed savings and mitigations.

Whilst recognising the funding pressures the local authority was facing, Councillor Grahl also felt it important to acknowledge where progress had been made and listed several areas of improvement that should be commended, including historic debt falling by £23.7m, which was the first overall reduction in five years, Council Tax Collection improving to 91.6%, and Business Rates Collection increasing to 94.1%. She attributed those improvements to additional capacity that had been put into those services, earlier recovery action, better use of data and more targeted engagement with residents.

In welcoming these improvements, Councillor Grahl also recognised the ongoing nature of challenges faced by many residents with the Council having invested £1.5m into a Hardship Fund that had supported more than 13,000 households facing genuine financial difficulty. She highlighted that the Council continued to invest in Brent’s future, with more than £200m invested through the capital programme in housing, regeneration, roads, parks, public buildings, additional SEND places and the completion of 543 new Council homes.

Having detailed the progress made over the previous financial year, Councillor Grahl again emphasised the seriousness of the underlying pressures, with the biggest overspends concentrated in services the Council had legal and moral responsibilities to provide. Housing Needs and Support had recorded a large overspend last financial year, with nearly 8,000 homelessness applications which represented an increase of 40% compared with the previous March. Adult Social Care had also recorded an overspend with more older people requiring increasingly complex care requirements, and the cost of homecare, residential care and nursing placements continuing to increase significantly. She advised that these were not discretionary pressures that the Council could ignore, but the consequences of an ageing population, an unaffordable London housing market, rising private rents and a care market where costs continued to outstrip available funding.

In detailing the pressures being faced, Councillor Grahl asserted that the Council would continue to take responsibility for areas within its control through strengthened forecasting, challenging unnecessary expenditure, collecting income owed to the Council and holding services accountable for delivering within their budgets. She pointed out, however, that Councils could not resolve the national housing crisis, reform the care market or repair the SEND funding system alone, and therefore welcomed the Government’s commitment to multi-year financial settlements and stronger recognition of need and advocated for that commitment to now be followed by sustainable funding for homelessness, Adult Social Care and SEND, concluding that Cabinet needed to be disciplined in protecting the services which Brent residents depended on.

In recognising the challenges being faced whilst also commending the improvements and prudent financial management of the overspend,Cabinet RESOLVED to note the financial outturn for 2025-26.