The Finance Overview and Scrutiny Committee meeting on 08 October 2026 discussed the council's significant financial challenges, including a substantial structural budget gap driven by reduced government funding and increased demand for services. The committee reviewed proposals regarding the Medium-Term Financial Strategy, which includes a significant Council Tax increase, and the Council Tax Reduction Scheme, proposing changes to support working-age households.

Medium-Term Financial Strategy and Council Tax Increase

The committee extensively debated the council's Medium-Term Financial Strategy (MTFS) for 2026/27, which outlines a significant financial challenge due to a 40% reduction in general grant funding from the government, amounting to £84 million annually by 2029/30. This, coupled with an inherited budget gap requiring £50 million of reserves to balance the current year's budget and ongoing demand pressures in social care and homelessness, necessitates a multi-pronged approach to restore financial sustainability.

The MTFS proposes a combination of measures to address the budget gap, including £79 million in ongoing savings from service reforms and demand management, a reprioritisation of the capital programme to reduce borrowing, and a controlled use of reserves. Crucially, it includes a planning assumption for a significant increase in Council Tax. Officers confirmed that without an increase in Council Tax above the government's referendum limit, the Council's budget would not balance.

Councillor Henson questioned the modelling for a single 94% Council Tax increase compared to a phased increase over two years, asking for details on the effect on reserves, borrowing costs, and collection rates. Mrs. Mary, Executive Director of Finance, confirmed that phasing the increase would significantly reduce reserve balances. Councillor Graham, Deputy Leader of the Council and Cabinet Member for Finance, stated that the proposed increase was a planning assumption and that the final decision on Council Tax would be made by Full Council in March 2027. He also highlighted that the government had provided Council Tax flexibility for 2027/28 and 2028/29, allowing increases above the standard referendum limit without a local referendum.

The proposed increase, if implemented in 2027/28, would see Wandsworth's share of the Band D Council Tax rise from £510 to £1,468, resulting in an indicative total Band D bill of approximately £1,978. This represents a 94% increase on the current year's charge. The council is also challenging the government's funding intentions through the Sustainable Communities Act.

Arguments were made that this significant Council Tax increase would have a detrimental effect on residents, with a petition against the increase garnering over 10,000 signatures. Concerns were raised about the impact on the elderly, pensioners, key workers, and single-income households. The Cabinet Member for Finance responded by urging residents to join the challenge against government funding cuts and highlighted that the opposition's refusal to support this challenge was contributing to the financial gap.

Council Tax Reduction Scheme Consultation

The committee discussed proposed changes to the working-age Council Tax Reduction (CTR) scheme, which aims to make it more financially sustainable. Councillor Graham explained that the current scheme, which offers up to 100% support, is projected to cost £14 million annually by 2030/31 if left unreformed. The proposed changes aim to ensure that all working-age households contribute something towards their Council Tax, while also extending support to some low-income working households currently excluded from the scheme.

The proposed Option 3 involves removing the WA1 category, which currently provides 100% CTR for vulnerable households, including those with disability-related benefits or a child under three. These households would be reassessed under other categories, likely resulting in a reduced level of support. However, the changes would be phased in over four years to allow households to adjust, and new income bands would be introduced to extend some support to low-income working households.

Councillor Henderson raised concerns about the combined effect of Council Tax increases and changes to the CTR scheme on low-income households, particularly disabled residents, carers, and families with children under three. Mrs. Mary confirmed that while the financial impact for each household band has been modelled, the specific differentials for those currently in the WA1 band are difficult to predict precisely. The council plans to contact all households with email addresses to gather more detailed information on individual impacts.

The committee acknowledged that the proposed changes to the CTR scheme would be difficult for many residents and that the council was in a difficult situation. It was suggested that the scheme be brought back to the December meeting for further discussion.

General Fund Capital Programme Update

The committee reviewed an update on the General Fund Capital Programme, which has been revised following the Spending Review. Proposed additions to the programme total £6 million, including £3 million to progress the refurbishment of Wandsworth Town Hall. This refurbishment is intended to secure the building's long-term future and provide efficient office space, with the project expected to be self-financing through the release of surplus accommodation and capital receipts.

Significant reductions in the capital programme were also noted, totalling £77.9 million. These include the removal of funding for the Net Zero Decarbonisation Strategy (£20 million) and the Wandsworth Environment and Sustainability Strategy (£8.2 million), with funds to be reinvested in improving the Council's housing stock. The Wandsworth Town Centre Transformation Scheme has also seen a reduction of £18 million, with revised, lower-cost proposals being developed. The Alton Estate Renewal Portswood Place scheme has been cancelled, with funding released to focus on Block A of the Alton Estate and to co-locate community-based services.

The committee also discussed the financing of the capital programme, noting that capital receipts have been fully used to finance capital spend as at the end of 2025/26. Borrowing will be required to fund the programme, and the Council is exploring the flexible use of capital receipts to fund transformation projects, potentially up to £30.5 million between 2026/27 and 2030/31.

Culture and Leisure Concession Scheme

The committee discussed the proposed replacement of the current Access for All scheme with a new Culture and Leisure Concession Scheme from 1 January 2027. The new scheme aims to be more targeted and financially sustainable, focusing on residents with evidenced need and leisure activities linked to health, wellbeing, and participation. Eligibility will be narrowed to residents in receipt of Carer's Allowance, students, Looked After Children, and care leavers. Automatic age-based concessions for older residents will not be included in the core scheme, though a future means-tested concession will be considered.

The current Access for All scheme, which has been in place since April 2025, has a broad eligibility and offer, with 10,895 registered members. However, its reserve-funded model is not financially sustainable. The new scheme will use a paid concession model, with discounts typically ranging from 20% to 40%.

Concerns were raised about the potential negative impact on residents who may lose eligibility or see reduced benefits, particularly those with disabilities, women, and younger people who are disproportionately represented in the current scheme's membership. Mitigation measures include a managed transition, clear communications, signposting to alternative support, and the potential development of a water safety initiative offering free swimming lessons for children.

Quarter 1 Financial Monitoring 2026/27

The committee received an update on the Council's revenue budget forecast for 2026/27. The Council is projecting an overspend of £5.306 million (1.7%) against the approved General Fund revenue budget. This forecast assumes the delivery of £12 million in mitigating actions throughout the year.

The primary drivers for the projected overspend are demand pressures in Adult Social Care, particularly for older people and adults with learning disabilities, and increased costs in Children's Services due to rising complexity of need and placement costs. Housing is also facing pressure due to increasing demand for temporary accommodation.

Mitigating actions include savings from the Transformation Programme, managing demand growth, and working with health partners to maximise appropriate health funding. However, officers acknowledged that the delivery of these mitigations is subject to rigorous oversight and carries risks, particularly concerning the timing and achievement of savings.

Work Programme

The committee discussed the approach to developing its work programme. It was suggested that an informal meeting would be held in November to collectively discuss potential topics, followed by formalisation with timelines at the December meeting. Areas of interest for future scrutiny include demand pressures in health and children's services, drawing on the experience of councillors with previous briefs in these areas. The committee also considered the establishment of Task and Finish Groups for in-depth reviews of specific issues.

Questions to the Cabinet Member

During the Questions to the Cabinet Member session, Councillor Richard Jones inquired about the council's challenge to government funding cuts under the Sustainable Communities Act. The Cabinet Member reported over 11,000 responses to a resident consultation, with a high percentage in support of the challenge. He also noted that the previous administration had not taken legal action against the government over these cuts.

Councillor Sweet asked about the previous administration's use of reserves in budgeting. The Cabinet Member explained that the previous administration had used reserves to balance budgets, leading to a significant reduction in usable reserves. He contrasted this with the current administration's approach of aiming for a completely balanced budget by 2030-31 without the use of reserves.

Other Discussions

The committee also touched upon the General Fund Capital Programme update, noting proposed additions and reductions to schemes. The suspension of the Wandsworth Grants Fund for four years was discussed in the context of the Equality Impact Needs Assessment, which identified potential negative impacts on disabled residents, children, young people, and older people, with mitigation measures proposed.

The meeting concluded with a discussion on the work programme, with a consensus to hold an informal meeting to collectively shape future scrutiny activities.