This meeting was about the council's budget for 2025/26, as well as approving its Capital Investment Strategy for 2024/25 to 2034/35, and making decisions on rents and service charges for tenants. There was also a report on the current financial monitoring position of the council. It is important to note that this is only a summary of what was scheduled to be discussed in the meeting. It does not tell us what was actually discussed, or what decisions, if any, were made.

Budget and Council Tax Setting 2025/26

This report presented the proposed budget for 2025/26 to the Cabinet. The report proposed a budget of £522.631 million for 2025/26 and an increase in Council Tax of 4.99%, including a 2% precept for Adult Social Care and a 2.99% general increase. It was noted that the Government has launched a consultation on changes to the way local government is funded alongside the settlement consultation however at this point, there has been no clear indication of funding levels for local government beyond 2025/26. It was proposed that the increase in Council Tax be used to mitigate against increased demand for services; including Adults and Children’s Social care; Special Needs provision and Temporary Accommodation as well the impact of reductions in central government funding to enable the Council to achieve its’ overall savings targets and provision of services. In order to achieve a balanced budget for 2025/26, it was proposed that total savings of £9.134 million be made and an additional £3.354 million be drawn from the Budget Strategy Reserve. The report noted a £20.522 million overspend in 2024/25 as a result of a slight increase in admissions but predominantly due to a decrease in households leaving TA, with the greatest overspend on Temporary Accommodation. The report stated that it was anticipated that the £20.522 million overspend will be funded from a combination of one-off funding, corporate balances and some drawdown from reserves. The report noted plans to respond to this increasing pressure, including sourcing alternative accommodation for use as TA such as the recent lease of a local hotel to provide an addition 221 units at significantly reduced cost in comparison to commercial hotels. The report listed sharp rises in costs and demand for vital services that support and protect residents, alongside a significant reduction in funding over the last fourteen years as reasons for the overspend. The report stated that [a]cross London, councils are supporting more people at risk of being homeless, at the same time as costs of securing temporary accommodation are increasing. The report noted that the average unit cost of TA to the Council after subsidy was £246 in November 2024 and peaked at £378 in May 2024 but in comparison was £199 in December 2023. The report outlined that the number of households in TA between November 2023 and November 2024 has increased by 56% from 990 to 1,549. The report outlined that the Council’s overspend on TA in 2023/24 was £1.2 million and is currently forecast at £11.376 million for 2024/25. The report presented an amended fees and charges schedule for 2025/26 (Appendix 6). The report noted that Councillor Vicky Ashworth will be added to the membership of the Shareholder Committee.

Capital Investment Strategy 2024/25 – 2034/35

The report presented the council's Capital Investment Strategy for 2024/25–2034/35 (Appendix 1). The Capital Investment Strategy included £712.04 million for investment in the borough across the period, with £410.8 million (58%) of the total investment relating to the Housing Revenue Account (HRA), specifically to maintain council-owned homes and estates. The Capital Investment Strategy listed £99.5 million – £41.7 million HRA (excluding appropriations to the GF) and £57.8 million GF – of our total investment for the delivery of affordable homes. The Capital Investment Strategy included £47.2 million for regeneration, £52.7 million for schools, and £79.1 million for infrastructure, highways, parks and council service improvements. The Capital Investment Strategy included £19.5 million – £13.8 million GF and £5.6 million HRA – as contingency as part of a robust risk management and assurance strategy to support delivery of our capital investment plans.

Housing Revenue Account (HRA) Budget, including Tenants Rents and Service Charges 2025/26

The report presented the proposed HRA budget for 2025/26 (Appendix 1), as well as rents and service charges. The report proposed increasing dwelling rents by 2.7%, which would mean that on average rents will increase by £3.44 from £127.29 to £130.73 per week. The report outlined plans to increase garage rents by 5% (£0.87) for residents and 30% (£5.72) for non-residents. The report set out that the average service charges for council tenants be set as follows:

The report also presented a ten-year Capital Programme for 2025/26 (Appendix 2).

Financial Monitoring – 2024/25 Month 9

This report presented the current financial position of the council, as of Month 9 in the financial year. The report predicted a net overspend of £20.522 million, up by £4.265 million from Month 6, predominantly in relation to Adults Social Care (£7.585 million), Housing General Fund (Temporary Accommodation) (£6.570 million), SEND (£4.655 million) and Children’s Social Care (£1.887 million). The report stated that the month 9 forecast for the HRA shows an overspend of £3.026 million, an increase of £1.629 million from month 6 The report stated that the HRA overspend will be met by a reduction of £3.000 million in the Revenue Contribution to Capital Outlay (RCCO) and a reduction in the general contribution to reserves of (£0.026 million). The report predicted an in-year DSG deficit of £7.059 million, taking the total cumulative deficit to £7.958 million, an increase of £2.458 million since Month 6. The report predicted that the Capital Programme will be underspent by £26.48 million. The report outlined plans to identify £10 million savings, in-year, to reduce this overspend. It was noted that services are currently working on proposals and to date, proposals totalling £6.574 million have been designed. The report stated that in response to the overspend a new financial strategy has been put in place, but this has decreased from £9.074 million (£2.500 million) due to a detailed review of ASC savings, which are not achievable in-year but reprofiled to future years. The report noted that the overspend includes in-year savings of £5.033 million and that assuming that all current proposed savings are delivered in full, the forecast overspend would be £18.981 million. The report predicted that [t]he final overspend position will be funded from several one-off sources including corporate balances such as contingency, unallocated grant funding, anticipated surplus from the eight-borough business rate pool, business rates levy announced as part of the provisional settlement and any balance from the Budget Strategy Reserve (BSR). The report outlined a number of risks including:

• Adult Social Care as the provision to fund any increases in client numbers or need has been utilised. • Children Social Care as it is predicated on maintaining the mitigations assumed and savings delivered in- year. • The increasing demand for Temporary Accommodation as placements across London has increased by 10% over the last 12 months. Households are also staying in Temporary Accommodation longer due to the lack of affordable Private Sector homes and social housing. • An increasing pressure in SEND both in transitions within the General Fund and increasing costs within the High Needs Block. The report noted that the London Walthamstow Hotel lease, which began in November 2024 and provides an addition 221 units of temporary accommodation, has reduced the number of households in hotels and bed and breakfast from 135 (October 2024) to one (January 2025). The report mentioned plans to deliver settled accommodation and an increase in prevention work that will assist with reducing the spend on temporary accommodation. The report stated that expenditure on the High Needs block must continue to be monitored carefully as the Council continues to develop its strategy to contain costs within the DSG High Needs Block for 2024/25 and beyond. Without mitigations this annual pressure on the High Needs block will continue and would lead to very significant cumulative deficits in future years. The report stated that the Department for Education (DfE) will meet council officers in January 2025 for an update on the Council’s High Needs DSG position and its plan to mitigate future deficits. The report proposed an adjusted budget of £161.35 million for the Capital Programme in 2024/25 and £656.73 million for the 10-year programme (an increase of £24.94 million). The report proposed to utilise £3.644 million from the Budget Strategy Reserve to fund improvement and transformation costs to deliver the scale of change required in the organisation and to manage the Medium-Term Financial Plan, with the money to be used for: • SEND improvement – to manage caseload backlogs and improved commissioning arrangements (£0.718 million). • Business support – to conclude and implement the final phases of the review (£0.654 million). • Family first transformation for 2025/26 to enhance practices and create resources for children on the edge of care (£0.252 million). • ASC transformation delivery (commissioning, technology, brokerage, and financial assessment resources) (£0.440 million). • Oracle stablisation (£0.354 million). • Resources to deliver transformation (£0.900 million). • Feasibility studies for asset transformation programmes (£0.240 million). • Development of the Place target operating model (£0.050 million). The report stated that all requests are supported by business cases and scrutinised by SLT.

Minutes of the previous meeting

The minutes of the meeting held on 14 January 2025 (Minutes of Previous Meeting) were scheduled to be discussed. The minutes included decisions on the council's response to damp and mould, the adoption of a Sufficiency Strategy, school admission numbers for Chapel End Infants and Edinburgh Schools, and the draft Local Funding Formula for Schools 2025/26.