The Overview and Scrutiny Committee meeting on 10 November 2025 focused heavily on the Council's challenging financial position, with discussions around a significant projected overspend and the strategies being implemented to mitigate it. Key decisions included noting the budgetary control report, which highlighted an anticipated £31.666 million overspend for the financial year, and reviewing the Treasury Management Strategy and Budget Strategy for the upcoming years.

Budgetary Control Report Quarter 2

The committee received a stark update on the Council's financial performance as of 30 September 2025. Councillor Vanisha Solanki, Deputy Leader and Cabinet Member for Finance, presented the Budgetary Control Report for Quarter 2, revealing a projected General Fund overspend of £31.666 million for the 2025/26 financial year. This figure, while a decrease of £10.367 million from Quarter 1, remains a significant concern, primarily driven by pressures in adult social care and homelessness services.

The report detailed overspends across directorates, with the People Directorate forecasting a £28.230 million overspend and Place, Communities & Enterprise a £23.507 million overspend. These ongoing pressures are of particular concern as they risk rolling forward into the next financial year, making the challenge of setting a balanced budget more difficult. While mitigating actions totalling £3.916 million have been incorporated into the forecast, a further £3.816 million in planned mitigations are yet to be delivered, and new pressures continue to emerge.

Savings delivery is also a concern, with £8.4 million of savings in doubt, contributing to the forecast overspend. The Council's earmarked reserves have been reduced to balance the 2024/25 position, and a significant draw on these reserves is anticipated for 2025/26, severely impacting the Council's financial resilience.

Councillor Daniel Morgan-Thomas highlighted that the Place, Communities & Enterprise Directorate had only achieved 30% of its savings target, with a significant pressure in the homelessness service area contributing to this. Councillor Paul Canal questioned the specific actions taken to prevent ongoing overspends from becoming structural deficits. Councillor Solanki explained that initiatives included re-enablement and prevention work, a Home Truths campaign for housing, and collaboration with health partners. Councillor Santos, Cabinet Member for Adults and Health, detailed efforts within adult social care, including the rollout of Magic Notes for AI note-taking and Power BI for caseload management, alongside a review of care packages and increased oversight of hospital teams.

A significant concern raised was the potential depletion of reserves, with Councillor Paul Canal asking about the minimum safe level of reserves and the risk of a Section 114 notice. David Kuenssberg, Executive Director for Resources, stated that ideally, the general reserve should be around £20 million, a level the Council will be below by the end of the financial year. He confirmed that a Section 114 notice would become a statutory requirement if a balanced budget could not be set.

Budget Strategy 2026/27

Councillor Vanisha Solanki presented the Budget Strategy for 2026/27, outlining the Council's approach to achieving a balanced budget in the medium-term. She acknowledged the significant financial pressures faced by local government, particularly in adult social care and homelessness, exacerbated by historic underfunding and rising demand. Despite Redbridge being recognised for its high performance and efficiency by IMPOWER, these pressures are becoming increasingly difficult to manage.

The strategy acknowledges the positive indications from the government's fair funding review, which is expected to rebalance funding nationally and potentially benefit Redbridge over three years. However, the current position remains challenging, and the Council anticipates needing financial support from the government to stabilise its position while planning for the future. The report highlighted that the Council has lost approximately £160 million in real terms funding since 2010 and remains one of the lowest-funded local authorities in London.

The budget consultation, which attracted over 300 responses, indicated that residents prioritise investment in highways, environment services, parks, leisure, and culture, with significant support for plans to invest in more housing to tackle homelessness and regenerate the borough.

The Council plans to become leaner, more efficient, and modern while continuing to invest in communities and deliver essential services. This will involve a robust modernisation programme and strong leadership to manage finances responsibly.

Councillor Kumud Joshi raised concerns about managers adhering to budgets, suggesting that overspends could be deducted from future budgets, a practice common in some councils. Councillor Solanki responded that statutory services like adult social care and homelessness face increasing demand, making it difficult to hold specific services accountable in the same way as non-statutory ones.

Councillor Matthew Goddin inquired about the Council's experience with seeking financial support from central government, similar to other authorities. Councillor Solanki confirmed that finance officers are in touch with other authorities receiving such support and are taking advice from the public sector finance body, SIPFA. The Council has signalled its likely need for support, with formal ministerial sign-off expected in February, but provisional assurance anticipated in December or early January to enable budget balancing.

The report also touched upon the Council Tax, with Councillor Solanki explaining that the current 4.99% increase has been necessary to protect frontline services. She noted that the adult social care precept accounts for 2.99% of this increase, with the GLA precept making up the remainder.

Treasury Management Strategy Mid-Year Review

The committee also reviewed the 2025/26 Treasury Management Strategy Mid-Year Review. Councillor Solanki reported that treasury activities have been conducted in line with the approved strategy and within Prudential Limits. The Council's borrowing and investment activities for the first half of the financial year were in accordance with the strategy, with risks managed and balanced against yield.

Councillor Paul Canal questioned the impact of global economic volatility on investment strategy and the Council's borrowing. Councillor Solanki explained that the Council takes careful notice of its advisors and balances risk against returns. Ian Ambrose, Operational Director of Finance, noted that global turmoil is keeping gilt rates unhelpfully high, making borrowing more expensive.

Councillor Paul Canal also raised concerns about the Council's long-term plan for reducing its £470 million borrowing and the confidence in capital slippage not deferring future revenue pressures. Councillor Solanki stated that while reducing borrowing is ideal, the Council is not in a financial position to make significant inroads into long-term borrowing at this stage. The debt portfolio is periodically reviewed for rescheduling opportunities.

Updates from Chairs of Policy Development Committees

Several Chairs of Policy Development Committees provided updates on their work:

• Councillor Alex Holmes (Children & Young People PDC) reported that their next meeting would discuss SEND in mainstream education.
• Councillor Joe Hehir (Clean & Green PDC), represented by Councillor Guy Williams, noted a workshop on disabled parking bays and blue badges, with a visit to support those with disabilities or mental health issues. Feedback is awaited for a draft report.
• Councillor Sunny Brar (Health & Care PDC) stated that officers are planning visits for the committee.
• Councillor Kumud Joshi (Homes & Neighbourhoods PDC) reported that their next meeting would select a new theme.
• Councillor Mushtaq Ahmed (Safe Redbridge PDC) mentioned a workshop with the police on ward panels and perceptions.
• Councillor Judith Garfield (Strategy & Resources PDC) indicated that their customer experience report is nearing completion, and a visit to the engagement hub was informative.
• Councillor Matthew Goddin (External Scrutiny Committee) had no report as their next meeting is in December.
• Councillor Daniel Morgan-Thomas (Health Scrutiny Sub-committee) noted their next meeting was scheduled for 26 November.
• Councillor Anne Marie Sachs (Education Scrutiny Sub-committee) reported that their meeting had been rescheduled to 24 November due to an accident involving an interim operational director.

Overview and Scrutiny Committee Work Plan 2025-2026

The committee discussed and agreed on updates to the Overview and Scrutiny Committee Work Plan for 2025-2026. A minor correction was made regarding the name of the Chair for Safe Redbridge. The plan was agreed subject to changes being made before the December meeting.

The meeting concluded with the noting of the date for the next meeting on 8 December 2025.