The Public Accounts Select Committee met on 29 January 2026 to discuss the council's budget for 2026-27, which included a proposed 4.99% increase in Council Tax. The committee also reviewed the council's work programme for the remainder of the municipal year.

Council Budget 2026-27

The committee received a comprehensive presentation on the council's budget for the upcoming financial year. Mayor Acres and Councillor Amanda De Ryk, Cabinet Member for Finance, Resources and Performance, outlined the challenging financial environment facing local government, noting a 17% real-term reduction in spending power per person since 2010. Despite these pressures, the council aims to protect vital public services and support residents, particularly those in need.

The budget proposes a 4.99% increase in Council Tax, which is below the 5% threshold that would trigger a referendum in some boroughs. This increase, combined with the GLA precept, will result in an overall rise of just under 5% in council tax bills. The council will also be reducing the collection of Council Tax down to 95%, acknowledging the significant cost of living pressures faced by residents.

A key aspect of the budget is the planned use of £2.4 million of reserves, described as a planned and temporary measure reflecting prudent financial management. Looking ahead, the council will need to deliver around £50 million of savings over the next three years.

The report detailed various financial implications, including:

• General Fund Revenue Budget and Council Tax: The proposed budget for 2026-27 is £422.220 million, funded by a combination of the provisional Fair Funding Allocation, forecast Council Tax receipts (including the 4.99% increase), Recovery Grant, Recovery Grant Guarantee, and consolidated grants within Core Spending Power.
• Fees and Charges: The council plans to increase fees and charges by Consumer Price Index (CPI) plus 1% for 2026-27, which is 4.8%, with some minor exceptions.
• Dedicated Schools Grant (DSG) and Pupil Premium: The overall DSG allocation for 2026-27 is £418.82 million, a 5.8% increase. However, this includes significant streamlining of grants, meaning the increase to schools funding is below inflation. Pupil numbers have decreased for the seventh consecutive year in primary schools, putting pressure on budgets.
• Housing Revenue Account (HRA): A proposed rent increase of a minimum of 4.8% is planned, averaging £5.95 per week. The annual expenditure for the HRA is projected to be £275.7 million in 2026/27, including capital investment in existing stock and new homes.
• Treasury Management Strategy: The strategy for borrowing and investments remains prudent, with officers exploring alternative investment options and debt restructuring to reduce risk and fund capital plans.
• Capital Programme: The proposed Capital Programme for 2026/27 to 2029/30 is £539.3 million, with £213.6 million allocated for 2026/27. This includes significant investment in housing, regeneration, education, skills, and the local environment.
• Climate Budget: The council is publishing its third annual Climate Budget, noting a continued engagement with the GLA and Pan-London networks.

During the discussion, Councillor Hau-Yu Tam raised questions about the taxing of second and empty homes, suggesting the council was playing catch-up with other boroughs. Mayor Acres and Councillor Amanda De Ryk, Cabinet Member for Finance, Resources and Performance, defended the council's approach, stating they were charging the maximum allowable surcharge and had been proactive in this area for years.

Councillor Chris Barnham raised concerns about delays in Ofsted registering new residential accommodation for children's services, noting a 15-month delay. Officers confirmed this had been escalated and a date in March had been provided for inspection. Councillor Barnham also highlighted the persistent overspending on special educational needs, with a cumulative overspend of £21 million.

The committee discussed the council tax collection rates, with David Austin, Executive Director for Corporate Resources, explaining the process of managing the collection fund and the bad debt provision. He noted that collection rates typically rise by one to one and a half percent after the year-end, and closer to two percent if followed further. The target collection rate for the coming year has been left at 96%, but will be reduced to 95% for later years of the Medium-Term Financial Strategy (MTFS).

The committee also discussed the unwinding of reserves, with the proposition to put it all within the next financial year. David Austin explained this was to avoid consuming more reserves and to prevent making the subsequent years' savings targets larger.

The committee formally noted the report on the council budget.

Select Committee Work Programme

The committee received an update on its work programme for the remainder of the municipal year. The next meeting, on 29 January 2026, will consider financial monitoring (period 8), the 2026/27 treasury management strategy, and the 2026/27 council budget, including the MTFS and local government funding settlement. The final meeting of the year, on 10 March 2026, will cover financial monitoring, IT and digital services, and a further item to be confirmed to allow for emerging issues. Councillor James Rathbone, Chair of the meeting, proposed a retrospective review of the committee's work over the last four years, focusing on change programmes and lessons learned. This was met with general agreement from the committee members.

The meeting concluded at 9:13 pm.