The Leadership Team of Kensington and Chelsea Council met on Wednesday 15 July 2026 to discuss a range of important issues, including the ongoing recovery from a significant cyber attack, the adoption of a new Culture Plan, and the Council's financial outlook. Key decisions made included approving the future ICT strategy, endorsing the Culture Plan, and reviewing the final outturn reports for revenue and capital budgets, alongside the Medium Term Financial Strategy.

Update on Cyber Attack Recovery and Future ICT Strategy

The Council is making significant progress in recovering from the cyber attack that occurred in November 2025. At the time of the meeting, 94% of the Council's systems had been restored, with a target to have all systems back online by the end of the summer. While recovery efforts are on track, service backlogs have built up in areas such as revenue and benefits, complaints, and planning, with a target to address these by December 2026. The Council is also working with national experts and the ICO to manage the impact of data that was copied during the attack, with notifications to affected residents planned.

Looking ahead, the cyber attack has highlighted the need for a radical overhaul of the Council's IT infrastructure. The proposed Digital, Data and Information and Communications Technology (ICT) Strategy 2026-2030¹ was presented and approved. This strategy aims to modernise systems, strengthen cyber security, and simplify IT for both staff and the public. Key priorities include strengthening cyber resilience, creating a modern and independent ICT infrastructure, building a coherent digital ecosystem, simplifying applications, and treating data as a critical foundation. The strategy also emphasizes reimagining services around residents, building workforce capability, supporting transformation, ensuring financial transparency, building trust, and enabling innovation.

Culture Plan 2026-2030

The Culture Plan 2026-2030² was adopted by the Leadership Team. This plan provides a strategic framework for supporting culture across the borough, aligning cultural activity with Council Plan priorities such as promoting amazing spaces and building resilient communities. The plan was shaped by extensive consultation with residents, including young people and disabled residents, as well as the cultural and creative sector. A key aim of the plan is to unlock Section 106 funding from developers to support cultural initiatives. The plan outlines priorities including fostering a more joined-up cultural sector, promoting cultural activities, improving accessibility and inclusivity, expanding opportunities for children and young people, encouraging diverse cultural programming, and supporting local artists and venues.

Financial Outturn and Medium-Term Financial Strategy

The meeting reviewed the Final Outturn (Quarter 4) Revenue and Capital Financial Monitoring Report 2025-26³ and the Medium Term Financial Strategy 2027-28 to 2030-31⁴.

General Fund Revenue Budget: The Council reported a net overspend of £3.734m for the 2025/26 financial year, which is proposed to be funded from reserves. The cyber incident significantly impacted operations, leading to direct costs of £1.162m for the initial response and recovery phase, funded from the Budget Stabilisation reserve. Service backlogs in revenue and benefits, planning, and complaints are being addressed with additional resources, with targets for completion by December 2026.

Housing Revenue Account (HRA) Revenue Budget: The HRA reported an underspend of £577k, which will be added to the Working Balance.

General Fund Capital Programme: The General Fund Capital Programme saw an underspend of £5.601m against the revised budget, with significant slippage reported across several projects, including those in Environment and Neighbourhoods and Housing and Social Investment. New funding totalling £6.306m was also added to the Capital Programme, including for the Albert Bridge repairs.

Housing Revenue Account (HRA) Capital Programme: The HRA Capital Programme reported an overspend of £4.674m against the revised budget, primarily due to accelerated expenditure on the Kitchen and Bathroom Replacements programme and delays in other projects like Silchester Arches and Lots Road.

Savings: The Council achieved 81% of its total savings target for 2025/26, with £3.361m (19%) reported as unachieved. Reasons for non-delivery included procurement delays, restructuring impacts, and the cyber incident.

Reserves: The Council's total usable reserves stood at £87.326m at the end of 2025/26. The report detailed proposed movements between reserves, including transfers to fund redundancy costs and the cyber incident response, and requested approval for new funding requests from reserves totalling £21.271m.

Medium-Term Financial Strategy (MTFS): The MTFS highlights a significant estimated budget gap of £32.8m in 2027/28, projected to grow to £127.2m over the four-year period to 2030/31. This gap is driven by funding reform, increasing pressures in social care and temporary accommodation, and higher inflation assumptions. The Council is developing a multi-year Transformation Programme to address these challenges, focusing on service redesign, workforce development, digital transformation, working smarter, and strengthening communities. The strategy also noted the potential for increased Council Tax income and the impact of the cyber incident on collection rates.

Other Key Discussions

Annual Treasury Outturn Report 2025-26:⁵ This report summarised the Council's treasury management activities for the year, noting a favourable outturn on interest receivable (£1.638m over-achievement) and an underspend on interest payable (£1.055m). The Council operated within its approved treasury limits.

Housing Management Performance Reporting 2025-26:⁶ This report provided an overview of the Housing Management department's performance, highlighting strong performance in electrical and gas safety, and repairs satisfaction. However, complaints handling was significantly impacted by the cyber incident, leading to backlogs. Anti-social behaviour cases decreased, but resident satisfaction with handling remained low. Rent collection figures were unavailable due to the cyber incident.

Culture Plan 2026-30:⁷ This plan was endorsed, outlining the Council's strategic framework for supporting culture, with a focus on partnership working, promoting cultural activities, improving accessibility, expanding opportunities for young people, fostering diverse programming, and supporting local artists and venues.

Update on Recovery from the Cyber Attack and Adoption of Future ICT Strategy KD1014171:⁸ This report detailed the progress on cyber attack recovery and presented the Digital, Data and Information and Communications Technology (ICT) Strategy 2026-2030. The strategy was approved, aiming to modernise the Council's IT infrastructure and enhance cyber security.

Final Outturn (Quarter 4) Revenue and Capital Financial Monitoring Report 2025-26 KD1012678:⁹ This report detailed the Council's financial outturn for the year, highlighting a General Fund revenue overspend of £3.734m, an HRA underspend of £577k, a General Fund Capital Programme underspend of £5.601m, and an HRA Capital Programme overspend of £4.674m. The report also detailed savings delivery, reserve movements, and updates on Section 106 and CIL balances.

Medium Term Financial Strategy 2027-28 to 2030-31 KD1014008:¹⁰ This strategy outlined the Council's financial outlook over the next four years, projecting a significant budget gap driven by funding reform, service pressures, and inflation. It detailed the Council's approach to addressing this gap through a Transformation Programme and other options.

Annual Treasury Outturn Report 2025-26 KD1014052:¹¹ This report presented the outturn of the Council's treasury management activities, noting a favourable variance in interest receivable and an underspend in interest payable.