The Overview and Scrutiny Committee of Barking and Dagenham Council met on Monday 12 January 2026 to discuss the draft budget strategy for 2026-27 to 2030-31 and the proposed fees and charges for 2026. The committee reviewed the council's financial position, debated potential council tax increases, and considered various proposals for savings and transformation. No final decisions were made on the budget or fees and charges at this meeting, with further discussions and recommendations to follow.

Budget Scrutiny 2026-31

The committee received a report on the draft budget strategy for 2026-27 to 2030-31, presented by Richard Harbord, the Strategic Director of Resources and Section 151 Officer. He described the budget as unusually difficult due to the late arrival of the government's settlement and significant technical changes, including a new fair funding formula and a business rate reset. Despite these challenges, the settlement was considered better than anticipated for Barking and Dagenham, ranking as the fourth best among London boroughs.

A key concern raised was a projected shortfall of £9.6 million for 2026-27. While the initial cabinet report had outlined a planned drawdown of £10.97 million from reserves to address a larger deficit, the revised figure meant that drawing down reserves to cover the entire shortfall was not the preferred option, as it would leave reserves below recommended levels.

Discussions explored various options to address the shortfall, including not allowing for inflation in the budget. However, this was deemed undesirable due to the significant inflationary pressures in children's and adult services, where placement costs had risen by an average of 15%.

The potential for a council tax increase was a significant point of debate. While the government encouraged councils to increase council tax by up to 5% (or 10% for some boroughs), with the aim of 60% of funding coming from council tax over three years, councillors expressed reservations. Councillor Waker suggested forgoing the full council tax increase in the first year, proposing only a 2% increase to provide relief to residents facing the cost of living crisis, and using this breathing space to find efficiencies in services. This was countered by the Leader, who highlighted that not taking the full allowable increase would result in a government penalty of approximately 4% and a loss of around £900,000 per percentage point not raised. The Leader also noted that the council's budget support reserve had increased due to successful mitigation of planned drawdowns and transfers from other reserves.

The concept of transformation and invest-to-save schemes was also a central theme. Councillors discussed the need for fundamental changes in how services are designed, delivered, and prioritised, rather than relying on salami-slicing savings, which often impacts jobs. The peer review team's observation that the council has loads of money but needs to spend it more effectively was referenced. However, concerns were raised about the lack of detail in some transformation proposals and the absence of equality impact assessments. The council's limited capital receipts were identified as a barrier to funding invest-to-save initiatives.

The issue of council tax collection was also discussed, with a target of 97% set for the next year, a figure considered optimistic but necessary to encourage improved collection methods. The council's investment in new properties was highlighted as a success, providing sub-market rent housing and reducing reliance on temporary accommodation, which in turn generated income and saved jobs.

The committee also considered the council's reserves, with the general fund reserves standing at approximately £14 million, considered adequate by the Section 151 Officer. The report indicated that drawing down £2.5 million would bring reserves to the lower end of the recommended level.

The report on the budget strategy was presented for scrutiny, with further detailed questions to be submitted in writing.

Scrutiny of Fees and Charges 2026

The committee reviewed the proposed fees and charges for 2026, an annual report that aims to recover the costs of services provided by the council. While most services are free, charges are applied where appropriate. The report proposed increases for various services, with the aim of ensuring cost recovery and maintaining service delivery.

A specific point of discussion was the proposed 87% increase in street trading fees, which was benchmarked against neighbouring boroughs to ensure cost recovery for services such as waste collection, security, and parking. Concerns were raised about the fairness of this increase, particularly in comparison to benefits offered by neighbouring boroughs, and whether the increase applied to all forms of street trading, including small businesses with tables outside. It was clarified that the increase was primarily for parking market and market stalls, not for businesses with tables outside.

The issue of visitor parking permits, which had seen a 100% increase in the previous year, was also raised, with questions about whether further increases were necessary given the current budget situation. The committee was informed that service areas review their fees and charges annually to ensure cost recovery, and that increases are implemented when fees have not kept pace with rising costs.

The committee was informed that the consultation on the proposed fees and charges was ongoing, and that responses would be collated and presented in a future report. Councillors were encouraged to submit any further questions in writing to officers.

Work Programme

The committee noted its work programme for 2025-26, which included a future meeting with the Metropolitan Police to discuss the EHCP review. Members were urged to attend informal meetings related to in-depth scrutiny reviews.