The Budget Scrutiny Task Group of Westminster Council met on Thursday 29 January 2026 to discuss the council's Medium Term Financial Plan, including revenue and capital overviews. The meeting agenda also included discussions on Housing Services and Commercial Partnerships, Corporate Services, and Finance and Resources.

Medium Term Financial Plan

A significant portion of the meeting was scheduled to be dedicated to the council's Medium Term Financial Plan (MTFP). This included a review of the revenue overview, which was set to cover the implications of Local Government Funding Reform, the Provisional Finance Settlement, and the updated budget position for 2026/27 to 2028/29. The agenda indicated that discussions would also encompass the council's Transformation Programme, aimed at ensuring the organisation remains modern, people-centred, and financially resilient.

The capital overview was also scheduled for discussion, focusing on the current and proposed capital programmes. Specific areas of investment were to be examined, including significant allocations for Regent Street, Temporary Accommodation Acquisitions, and the Housing Pipeline, alongside the Pimlico Place Strategy.

Revenue Overview

The revenue overview was set to delve into the complexities of Local Government Funding Reform, noting the government's relaunch of the Fair Funding Review and its commitment to multi-year settlements. The agenda highlighted concerns that the proposed formula, based on population and deprivation, could negatively impact Westminster due to a reduced resident population and a deprivation measure that did not fully account for local demand or costs. The potential impact of resource equalisation, due to Westminster's high council tax base, was also a scheduled point of discussion. Further changes to business rates and the simplification of funding streams, including the integration of specific grants into core grants, were also on the agenda.

The Provisional Finance Settlement, published in December 2025, was to be reviewed, with a focus on its implications for Westminster. The agenda indicated that while national Core Spending Power was projected to rise, Westminster's Fair Funding Assessment grant was forecast to decrease significantly over the period, necessitating substantial floor protection. The updated budget position was to be presented, detailing changes since May 2025, including the impact of fair funding and other grant changes, service pressures in areas like Homelessness and Adult Social Care, and inflationary increases. The agenda also noted the planned savings and the role of the Transformation Programme in addressing the budget gap.

The 2026/27 to 2028/29 General Fund revenue budget was to be examined, with details on proposed savings, pressures, and investments. The agenda highlighted that no council tax increases were proposed within these papers, but the council would explore all avenues for efficiencies, including a minimum target of £30m annually from the new transformation programme. The potential impact of the government's announced Overnight Levy was also to be considered.

Capital Overview

The capital overview was scheduled to present the council's current 15-year capital programme, which had a gross budget of £2.496bn and a net budget of £1.320bn. The agenda indicated that the programme is reviewed and updated annually to ensure strategic alignment, reflect operational changes, and maintain affordability.

New investment priorities were to be discussed, including £34m for Regent Street to prioritise safer roads and pedestrian experience, £170m for Temporary Accommodation Acquisitions on an invest-to-save basis, and £28m for the Housing Pipeline to increase affordable homes. An additional £3.8m was allocated for the Pimlico Place Strategy, focusing on public realm improvements.

The proposed revised General Fund capital programme by Executive Directorate was to be presented, detailing expenditure forecasts across various directorates, including Housing & Commercial Partnerships, Westminster Builds, and Regeneration, Economy and Planning.

Housing Services and Commercial Partnerships

The meeting agenda included a detailed look at Housing Services and Commercial Partnerships, with a focus on the Housing Revenue Account (HRA) Business Plan and the General Fund budgets.

Housing General Fund Budgets

For 2025/26, Housing and Commercial Partnerships had a gross controllable expenditure budget of £166.102m. The agenda outlined planned savings of £1.785m from 2026/27 to 2028/29, including new savings from income target realignment, commissioning alignment, service transformation, and procurement efficiencies, alongside reductions in Temporary Accommodation spend. Pressures totalling £6.54m were identified, including a one-off Temporary Accommodation budget pressure. Investments totalling £1.489m were planned to support the recommissioning and transformation of Housing Solutions Service and the Temporary Accommodation Transformation Programme.

The operating context for homelessness services was to be discussed, noting the largely outsourced service until a recent insourcing decision. The agenda highlighted the acute national housing crisis and unprecedented demand for Temporary Accommodation (TA), with Main Duty Acceptances up 47% and TA Households up 57%. The TA portfolio was described as significant, posing a considerable financial risk to the council. The strategic response was to focus on prevention, early support, a new supply plan for TA acquisitions, and investment in systems, infrastructure, and data.

Grant funding for housing services was also on the agenda. The 2026/27 grant funding was confirmed at £18.362m, a reduction of 24% from 2025/26. The agenda noted that Temporary Accommodation funding would move from the Homelessness Prevention Grant into the core Revenue Support Grant. Capital grant funding, including up to £22.484m from the Local Authority Housing Fund (LAHF 3) and further allocations from LAHF 4, was also to be discussed.

Key capital projects over the next five years were to be detailed, including the Temporary Accommodation Acquisitions Programme, which planned for the acquisition of approximately 460 additional properties over three years.

Housing Revenue Account (HRA)

The Housing Revenue Account Business Plan, approved in March 2025, was to be updated to reflect cost pressures and additional costs not previously known, such as increased Building and Fire Safety surveys and remediation works. The agenda noted that to ensure a breakeven position, an assumption for rent convergence policy of CPI plus 1% plus £1 from 2026/27 had been made. The updated Business Plan included significant investment in major works and development and regeneration, but was noted to have minimal flexibility for future unknown pressures.

The 2025/26 HRA budget was to be presented, detailing income from dwelling and non-dwelling rents, charges for services, and other income, against expenditure for repairs, maintenance, management, and special services. The agenda highlighted that tenant rents are the largest source of income, with social rent levels governed by a national policy framework.

Income growth and savings proposals for 2026/27 to 2028/29 were to be discussed, including a dwelling rent increase in line with the Rent Standard (CPI +1% plus £1), and additional income from non-dwelling rents and commercial income. Operational efficiencies were also planned, focusing on reducing spend on voids, adaptations, and responsive repairs.

Investment proposals included £1.0m for the continuation of the Rent Support Fund to assist tenants facing difficulties with rent increases. General HRA pressures identified for 2026/27 totalled £15.8m, including significant costs related to Building Safety, Capital Financing, and Support Service Recharges.

Key projects over the next five years for the HRA capital programme, with a gross budget of £838.8m, were to be detailed. This included planned maintenance, such as major works, upgrades to the Pimlico District Heating Undertaking (PDHU), and climate works to achieve carbon neutrality targets. Development and regeneration projects, including Ebury Phase 2 and Church Street Site Regeneration, were also to be discussed.

Corporate Services

The meeting agenda included a review of the Corporate Services budget. For 2025/26, Corporate Services had a gross controllable expenditure budget of £22.555m. The projected outturn variance for 2025/26 was an overspend of £0.018m. Overall proposed savings up to 2028/29 were £1.071m, with growth required of £0.237m.

The agenda outlined proposed changes to the budget for 2026/27, including savings from Communications transformation, a review of payments to licensing agencies, reductions in subscriptions and campaigns budget, and a reduction in catering at Council meetings. Savings were also anticipated from a review of archive storage and vacancy control within Governance and Councillor Liaison. Further savings were planned from a review of recharges and funding for People & Culture, a review of Corporate meeting costs, and a reduction in Apprenticeships salary and programme costs. Savings were also to be realised from a review of the Policy and Strategy team's operating model.

Fairer Westminster Investments were also scheduled for discussion, including non-staffing costs associated with developing the City Plan. Pressures were identified in Legal Services for contract legal team headcount and an increase in the Election budget.

Finance and Resources

The Finance and Resources directorate's budget was also on the agenda. For 2025/26, excluding Housing Benefit, the directorate had a gross controllable expenditure budget of £94.396m. The projected outturn variance for 2025/26 was an underspend of £0.247m. Overall proposed savings up to 2028/29 were £11.133m, with pressures of £1.505m.

Key issues for 2025/26 were to be discussed, including the impact of the Fair Funding Review on local government finance, which was expected to lead to significant reductions in grant funding for Westminster. The agenda also noted the ongoing delays in the completion of audit work and the creation of the Local Audit Office. Digital and Innovation services were to be reviewed, with a focus on the responsible adoption of Artificial Intelligence and the continued effort to enhance cyber security. The impact of the cyber incident at the end of 2025 on planned activities and budgets was also to be understood. The decarbonisation strategy was to be discussed, noting the impact of the Department for Energy Security and Net Zero's decision not to commit further investment into the Public Sector Decarbonisation Scheme.

The 2025/26 budget for Finance & Resources was to be presented, detailing expenditure and income across services including Finance, Customer Experience, Digital and Innovation, Property Investments and Estates, Revenue and Benefits, Strategy and Intelligence, and Treasury and Pensions.

Proposed savings for 2026/27 to 2028/29 were to be detailed, including reviews of investment property income, closure of Lisson Grove overnight, and the 19th Floor Café subsidy. Savings were also anticipated from the insourcing of BT services and rationalisation of the service desk within Digital & Innovation, contract reviews, and the insourcing of the IT helpdesk service. An increase in income from the Second Home Premium was also projected. Capital financing reviews and reductions in contract spend were also on the agenda.

Pressures for 2026/27 to 2028/29 were to be discussed, including increases in audit fees, a reduction in contracted income for small cell concessions, increasing bank charges, and the removal of Rampayne Street from the Investment Property Portfolio.

The Finance & Resources capital programme for 2026/27 to 2030/31, with a gross budget of £196.989m, was to be reviewed. Key projects included Property Investment Acquisitions, Property Maintenance for operational properties, and the Carbon Management Programme. Other significant projects included Huguenot House Acquisitions, investment in Customer Experience, and improvements to Investment Properties.