Agenda item

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 2027/28.

Cabinet RESOLVED:

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

(2)  To agree the budget setting process for 2027-28, including the approach to consultation and scrutiny, as set out in section six of the report.

(3)  To note and agree the proposed 2025-26 capital budget carry forwards and capital virements for 2026-27 as set out in section seven of the report.

(4)  To note the financial position with regards to the Housing Revenue Account as set out in section eight of the report; and

(5)  To note the financial position with regards to the Schools and Dedicated Schools Grant as set out in section nine 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 overall financial position facing the Council and highlighting the significant risks, issues and uncertainties with regards to the Council’s Medium Term Financial Strategy (MTFS), as well as setting out the Council’s proposed budget setting strategy for 2027-28.

In presenting the report, Councillor Grahl advised that the report looked beyond the immediate pressures and set out the choices facing Brent up to 2031-32, with Brent starting from what she believed was a position of relative strength, having remained financially stable at a time when a growing number of Councils required exceptional support or government intervention. She also emphasised the impact of the multi-year funding settlement which had been offered for the first time in many years. In addition, the Fair Funding Review and reset of Business Rates had delivered a fairer share of resources for Brent, with greater recognition of deprivation and the demands on Councils to deliver services, which she expressed was a welcome change of direction providing more certainty and a foundation on which to plan.

Whilst welcoming the changes to funding from central Government, Councillor Grahl cautioned that there was still significant challenge for the Council, with a current estimated budget gap of £5m in 2027-28, rising by a further £15m the following year, and a cumulative gap of around £50m across the period 2031-32. She highlighted that this was made up largely of the additional costs of maintaining the services the Council already provided as inflation, demographic change and increasingly complex needs drove demand. Since 2010, she highlighted that Brent had already agreed £248m of savings, almost half its current net revenue budget, and was delivering a further £10.4m in the current financial year, leaving little scope to seek further reductions in the same way and areas moving forward.

As such, she felt the next phase in the Council’s strategy must be different and focused on redesigning services rather than shrinking them further. This meant investing in prevention, making better use of technology, improving productivity, strengthening commissioning and generating more income, whilst fostering stronger culture and leadership to work as one Council rather than protecting individual departmental budgets and operating in silos.

In moving forward with that approach, Councillor Grahl highlighted that the pressures faced were concentrated in areas where the Council had little control, with individuals living longer and requiring more complex care, specialist children’s placements adding significant pressures on costs, demand for Education, Health and Care Plans (EHCPs) growing and placing sustained pressure on the Dedicated Schools Grant (DSG), and the immediate risk presented by the demand in homelessness, where the cost of temporary accommodation had increased far more quickly than private rents and Brent’s net homelessness expenditure had risen by 85% in a single year.

In addressing the pressures, she confirmed that the Council would continue to use every lever available to continue to support residents whilst managing its financial situation. In the previous year, 67% of homelessness approaches were successfully prevented or relieved, and the Council’s wholly owned housing company, i4B, generated annual savings of more than £6m by providing affordable homes to homeless families. The Gardens Children’s Home would also provide local care at a lower cost than many private placements, and new prevention funding would help support families earlier. Whilst the Council took action where it could, she emphasised that it could not repair the housing market, reform the national care system, or resolve the SEND crisis alone, and called for further reform with proper funding.

Reflecting on Brent’s future, Councillor Grahl acknowledged that financial responsibility could not mean lowering the Council’s ambitions for Brent. She highlighted that the revised capital programme provided more than £1.25bn over five years to provide affordable housing, regenerate South Kilburn, make improvements to highways, deliver additional SEND places, provide CCTV, deliver family facilities, and complete essential repairs to homes and public buildings. The Pride in Place Programme would also deliver up to £40m for projects focused on Harlesden and St Raphael’s Estate over the next 10 years, with residents involved in deciding how that money would be used. She added that building homes, improving places and unlocking development created jobs and generated additional Council Tax, Business Rates and Community Infrastructure Levy income, contributing to a robust financial strategy.

In concluding her remarks, Councillor Grahl acknowledged that the multi-year settlement had given the Council a window to prepare properly, and committed to use that to rebuild resilience, develop a two-year budget plan, and align finances with the next Council Plan with greater funding certainty, a clearer picture of the risks, and time to make strategic choices.  On this basis, Cabinet was therefore asked to note the outlook, agree the budget-setting and consultation process, approve the proposed capital adjustments and note the position of the Housing Revenue Account and Dedicated Schools Grant.

In recognising the challenges and endorsing the way forward, Cabinet RESOLVED:

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

(2)       To agree the budget setting process for 2027-28, including the approach to consultation and scrutiny, as set out in section six of the accompanying report.

(3)       To note and agree the proposed 2025-26 capital budget carry forwards and capital virements for 2026-27, as set out in section seven of the accompanying report.

(4)       To note the financial position with regards to the Housing Revenue Account, as set out in section eight of the accompanying report; and

(5)    To note the financial position with regards to the Schools and Dedicated Schools Grant, as set out in section nine of the accompanying report.