The Budget Scrutiny Task Group met to discuss the council's Medium Term Financial Plan, focusing on the revenue and capital overviews, and the budget proposals for Adult Social Care, Public Health, and Children's Services. Key decisions included the acknowledgement of significant funding reductions due to the Fair Funding Review and the provisional local government settlement, leading to a substantial budget gap that will require substantial savings and the use of reserves.

Medium Term Financial Plan

The council faces a significant budget gap by 2028/29, projected to be £89 million, primarily driven by the Fair Funding Review and the provisional local government settlement. The Fair Funding Review, intended to reform the local government funding system, is expected to result in a substantial reduction in Westminster's grant funding. The provisional settlement indicates a national increase in core spending power, but this is largely expected to be met by council tax rises, with government grant funding increasing at a slower rate. For Westminster, this translates to a projected annual reduction in grant funding of £19.52 million in 2026/27, rising to £29.06 million by 2028/29, totalling a £75.9 million reduction over three years.

To address this, the council has identified new savings proposals totalling £54.5 million over the three-year period, with £29.2 million in 2026/27. A significant portion of these savings, a minimum of £30 million per annum by the third year, is expected to come from a new transformation programme called Westminster 2030 – Fit for the Future. This programme aims to modernise services, transform the customer experience, enable early intervention, embed digital innovation, optimise assets, and strengthen financial resilience.

The council is also facing service pressures, including increased demand and complexity in Adult Social Care (£4.3 million in 2026/27) and rising costs for homelessness and temporary accommodation (£5 million in 2026/27, though projected to decrease in later years). Inflationary pressures, particularly for pay and contract costs, are also a concern, with the London Living Wage increase of nearly 7% expected to impact service delivery.

The council is not proposing any council tax increases at this stage, but a 5% rise would yield an additional £4 million per annum. The potential introduction of an Overnight Levy on visitors to London is noted as a possible future income stream, though its retention by local authorities remains uncertain.

The capital programme for the next five years has a gross budget of £2.564 billion, with significant investments planned for Temporary Accommodation Acquisitions (£170 million) and Housing Pipeline projects (£28 million).

Adult Social Care

Adult Social Care faces significant challenges, including increasing demand and complexity of need, with demographic pressures identified at £4.3 million for 2026/27. The directorate plans to deliver £20.3 million in savings between 2026/27 and 2028/29, with £11 million of this being new savings. These savings proposals include continuing contract efficiencies, prevention initiatives, digital transformation of night support, and the use of AI for front-door functions.

A key investment is £0.4 million for five mental health step-down beds as a response to the closure of the Gordon Hospital. The success of these beds will be measured by their ability to increase flow from inpatient facilities to the community and improve patient outcomes.

Concerns were raised about the fragility of the adult social care market due to workforce shortages and funding complexities, with providers handing back contracts or exiting the market. The council is aware of these risks and conducts checks on providers. Inflationary pressures, including the London Living Wage, are accounted for separately in the budget, but there is a concern that these could erode efficiencies.

The council is also working closely with NHS partners and the West London Integrated Care Board (ICB) on health-related pressures, including the impact of the merger of two ICBs and the introduction of the Integrator role.

Public Health

The Public Health Grant for 2026/27 is confirmed at £42.1 million, a 2% increase in cash terms. However, financial pressures from inflation and rising service delivery costs risk eroding the real value of the grant. Commissioned services, often delivered by NHS organisations, face challenges with national NHS pay framework increases, potentially impacting contract costs. The grant remains ring-fenced for public health responsibilities, including statutory functions such as health visiting, sexual health, and health improvement activities.

Children's Services

Children's Services has a net controllable budget of £53 million for 2025/26, which includes £100 million of income from the Dedicated Schools Grant (DSG) passed on to schools and early years providers. For the period 2026-27 to 2028-29, savings of £8.591 million are proposed. Key savings proposals include reductions in SEN transport costs, re-charging parts of care packages to the DSG, and the redesign of services such as the Youth Offending Team and bi-borough social care leadership.

A significant saving of £3 million is anticipated from a regional care cooperative approach to care commissioning, aimed at reducing placement costs for teenagers entering care. This initiative builds on previous successes in concentrating on specific areas to achieve efficiencies.

The department is facing challenges with rising placement costs for children with complex needs, with a 25% increase in spending since 2018/19. There has also been a rise in demand from families with no recourse to public funds (NRPF), exacerbated by post-Brexit changes and challenges with Home Office decisions. Parental and adolescent mental health issues are now the primary reason for social work assessments, and there has been a decrease in jointly funded placements with the NHS, increasing the council's financial burden. Judicial delays in care proceedings are also contributing to increased placement costs.

The capital programme for Children's Services includes £7.513 million for care leaver supported accommodation and £7.389 million for SEN high needs and family support, funded through DfE grants.

Decisions Made:

• Medium Term Financial Plan: The council acknowledged the significant budget gap and the need for substantial savings and the use of reserves. The transformation programme, Westminster 2030 – Fit for the Future, was highlighted as a key strategy for delivering these savings.
• Adult Social Care: Savings proposals were presented and discussed, with a focus on efficiency and prevention initiatives. The investment in mental health step-down beds was noted.
• Public Health: The confirmed Public Health Grant for 2026/27 was noted, along with concerns about inflationary pressures eroding its real value.
• Children's Services: Savings proposals were discussed, with a particular focus on the regional care cooperative initiative. The challenges of rising placement costs and increased demand were acknowledged.

Topics Discussed in Order of Significance:

1. Medium Term Financial Plan and Budget Gap: This was the overarching theme of the meeting, with extensive discussion on the drivers of the budget gap, including the Fair Funding Review and the provisional local government settlement. The scale of the deficit (£89 million by 2028/29) and the proposed savings of £54.5 million, including £30 million per annum from the transformation programme, were central to the discussion. The impact of inflation and the potential for council tax increases were also considered.
2. Adult Social Care Budget and Savings: The significant pressures on Adult Social Care due to increasing demand and complexity were a major focus. The proposed savings of £20.3 million and specific initiatives like the mental health step-down beds were detailed. Concerns about market fragility and the impact of inflation were also raised.
3. Children's Services Budget and Savings: The challenges within Children's Services, including rising placement costs and increased demand from families with complex needs, were thoroughly discussed. The proposed savings of £8.591 million, particularly the £3 million from the regional care cooperative, were highlighted as crucial. The impact of mental health needs and judicial delays on costs was also a significant point.
4. Public Health Budget: While Public Health is fully grant-funded, the discussion highlighted concerns about inflationary pressures eroding the real value of the grant and the impact of rising costs on commissioned services. The confirmation of the grant for 2026/27 was noted.

Key Concepts and Policies:

• Fair Funding Review: A government initiative to reform the local government funding system, which is expected to significantly reduce grant funding for Westminster.
• Provisional Local Government Settlement: The initial announcement of government funding for local authorities, which forms the basis for budget planning.
• Medium Term Financial Plan (MTFP): A strategic financial plan outlining the council's budget position over several years.
• Transformation Programme (Westminster 2030 – Fit for the Future): A council-wide programme aimed at modernising services and achieving significant savings.
• London Living Wage (LLW): The minimum wage set for London employers, which has increased significantly and impacts contract costs.
• Dedicated Schools Grant (DSG): A ring-fenced grant from the government to fund schools and early years providers.
• No Recourse to Public Funds (NRPF): A status for individuals who are not eligible for most welfare benefits, often leading to complex support needs.
• Integrated Care Board (ICB): Local bodies responsible for planning and delivering integrated health and care services.
• Regional Care Cooperative: A model for commissioning care services on a larger, regional scale to achieve economies of scale and efficiencies.

People Mentioned:

• Councillor O Boothroy: Member for Finance and Capital Reform, who introduced the financial tax.
• Gerald Albonwell: Executive Director of Finance and Resources, who introduced the financial tax.
• Councillor John Gray: Councillor for West End Ward, who presented summary slides.
• Councillor Williams: Chair of the Budget Scrutiny Task Group.
• Professor Jack O'Bose: Lead Cabinet Member for Children's Services.
• Anita: Mentioned in relation to the Dedicated Schools Grant.
• Councillor Pillott: Mentioned in relation to health funding.
• Councillor Mendoza: Raised questions about the council's ability to raise council tax beyond the referendum limit.
• Councillor Scarborough: Raised questions on behalf of Councillor Lorraine Dean.
• Councillor Barnes: Member of the Budget Scrutiny Task Group.
• Councillor Hook: Member of the Budget Scrutiny Task Group.
• Councillor Piddock: Member of the Budget Scrutiny Task Group.
• Councillor Rowley: Member of the Budget Scrutiny Task Group.
• Councillor Taouzzale: Member of the Budget Scrutiny Task Group.
• Baroness Louise Casey: Tasked with reviewing adult social care.
• Sarah: Mentioned in relation to the Dedicated Schools Grant.
• Councillor Raleigh: Asked forecasting questions about demand in children's services.
• Bernie: Mentioned in discussions about adult social care and bi-borough services.
• Nafsika: Mentioned in discussions about adult social care savings.

Organisations Mentioned:

• Westminster City Council (WCC): The local authority holding the meeting.
• NHS England: The national body for the National Health Service.
• Department of Health and Social Care (DHSC): Government department responsible for health and social care policy.
• Metropolitan Police: Mentioned in relation to potential impacts on council services.
• North West London Integrated Care Board (NWL ICB): A regional health and care planning body.
• Local Government Association (LGA): An organisation representing local government in England and Wales.
• Oxford Brookes University, Institute of Public Care: Mentioned in relation to data sources for demand analysis.
• Home Office: Government department responsible for immigration and security.
• Department for Education (DfE): Government department responsible for education policy.
• CAFCASS: Children and Family Court Advisory and Support Service.
• West London Alliance: A sub-regional partnership of local authorities.

Places Mentioned:

• Westminster: The borough covered by Westminster City Council.
• London: The city in which Westminster is located.
• Gordon Hospital: A hospital whose closure has implications for mental health bed provision.
• Pimlico: An area in Westminster where public realm improvements are planned.
• Regent Street: A major street in London where road safety and greening initiatives are planned.
• Pimlico Station: A transport hub in Pimlico.
• Queens Park: An area in Westminster where a Family Hub is being developed.
• Bravington Road: The current location of the Queens Park Family Hub.
• North Paddington: An area where regeneration goals are being pursued.

Legislation Mentioned:

• The Health and Care Act 2022: Introduced a new role for the CQC to assess local authority adult social care duties.
• The Care Act: Legislation that permits councils to charge a fee to broker, organise, and monitor services for self-funders.

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