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 1 2026/27.

Cabinet RESOLVED:

(1)  To note the overall financial position and the actions being taken to mitigate the issues arising.

(2)  To note the prudential indicators for treasury management including in Appendix A to the report.

(3)  To approve the virements set out in section 5.13 of the report.

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 financial forecast for the General Fund revenue budget, the Housing Revenue Account (HRA), the Dedicated Schools Grant (DSG) and the Capital Programme as at Quarter 1, 2026-27.

In presenting the report, Councillor Grahl began by advising members that whilst recognising the nature of pressures identified, there were also signs that the approach taken over recent months was making a difference.  Although highlighting that the General Fund was forecasting a £9.5m overspend, which was not where the Council wanted to be, it was felt important to for members to understand that the pressure was concentrated almost entirely on pressures relating to homelessness and temporary accommodation with all other services forecasting a balanced budget at the time of reporting.

In recognising that housing remained the biggest challenge to the Council’s budget position, Councillor Grahl detailed the significantly high cost of private rents and scarcity of affordable homes as factors leading more families to turn to the Council for support. Whilst an additional £8m of funding had been allocated to Housing Need for the reporting year, demand had continued to rise. Councillor Grahl affirmed that Brent could not resolve London’s housing crisis alone, but could build homes, reduce reliance on the most expensive temporary accommodation, regulate the quality of private accommodation through the licencing scheme and help families into secure housing. As such, 406 new social homes were expected to become available, and she advised that the Council had already moved 89 households out of some of the costliest temporary accommodation, using new Council homes to help residents in greatest need. She confirmed that this gave families greater stability whilst also saving the Council money.

In outlining other areas of work that would help to reduce pressures on the Council’s finances, Councillor Grahl highlighted The Gardens Children’s Home which would help to support more young people in Brent rather than relying on expensive external placements, as well as the delivery of more than £320m of capital investment in homes, schools, SEND provision, regeneration and local infrastructure. There were £10.4m of agreed savings to deliver, and she confirmed that this year’s approach would not focus on asking services to make isolated cuts, but to work together with departments to improve productivity, use technology more effectively and identify new income, which she highlighted in her view was a more sustainable way of operating.

In addition, the opportunity was also taken to remind members of the longer-term risk associated with the Dedicated School Grant (DSG) with Councillor Grahl welcoming the approach adopted by the Government in terms of the commitment to support 90% of eligible High Needs Deficits and as a sign that the need for reform had been recognised.

In concluding her remarks, Councillor Grahl recognised that there was more to do and the Council needed to maintain a firm grip on spending throughout the year but affirmed that the Council was not standing still and simply managing decline, but building homes, investing in Brent and changing the way the organisation worked with Cabinet asked to note the forecast and endorse the actions being taken.

The Leader thanked Councillor Grahl for her introduction and invited Minesh Patel (Corporate Director Finance and Resources) to supplement her comments.  In support of the issues highlighted, Minesh Patel reinforced the comments around the DSG, which he advised remained one of the most significant areas of uncertainty. The Council had submitted its plan to show how it was managing the DSG High Needs Block last month and the Government had announced they would look to reduce 90% of those cumulative deficits, however there was still a strong likelihood of overspend of the High Needs Block in 2026-27, therefore the Council was pushing to understand the support that would be provided from the Government until those funding reforms were implemented.

In considering the report and acknowledging the significant pressures within Housing Need and Temporary Accommodation, Cabinet RESOLVED:

(1)       To note the overall financial position and the actions being taken to mitigate the issues arising.

(2)       To note the prudential indicators for treasury management in Appendix A of the accompanying report.

(3)    To approve the virements set out in section 5.13 of the accompanying report.