Decision details

RESOLVED:

That the Cabinet:

1.    Note the budget monitoring position and treasury management update as at August 2025 (Month 5) as set out in Part A of the report, furthermore, noting the actions proposed by officers.

2.    Approve the financial recommendations as set out below:

a.    Approve the forward phasing of £24m of HRA Capital Programme General Contingency into 2025/26 and to vire this budget to the HRA Acquisitions Programme Budget.

b.    Approve the transfer of £20m of capital budget relating to Housing Developments from the General Fund Capital Programme to the Acquisitions Programme within the HRA Capital Programme.

c.    Approve the transfer of £8.0m from the 2025/26 HRA Capital Contingency budget to the HRA Capital Acquisitions budget.

d.    Note and endorse the implementation of enhanced revenue spend controls across all service areas in order to reinforce financial discipline, ensure alignment with the Council’s MTFS and mitigate further deterioration of the Council’s financial position.

e.    Note and endorse a comprehensive review of the General Fund Capital Programme to identify schemes where expenditure is not critical and may be delayed, reduced, or discontinued.

f.     Agree to increase the Council’s No Recourse to Public Funds (NRPF) policy rates to match the Home Office asylum support rates, ensuring compliance with legal standards and safeguarding the welfare of families supported under Section 17 of the Children Act 1989.

Reasons for decisions

The Cabinet Member for Finance & Transformation presented the Month 5 Budget Monitoring Report, highlighting a projected adverse position of £30.2 million for the 2025–2026 financial year, driven by increased demand for statutory services including adult and children’s social care, homelessness, and asylum support. Without exceptional financial support from central Government, reserves were forecast to be overdrawn by £24.9 million.

The Cabinet Member emphasised that these pressures stemmed largely from historic underfunding and the Council’s commitment to maintaining low Council Tax and charges. Additional funding was being sought to address costs linked to asylum seekers arriving via Heathrow. Savings of £38.8 million were projected, with the majority on track for delivery.

The Housing Revenue Account remained balanced, despite variances in rental income and operating costs, and the acquisition of housing stock was exceeding expectations.

The Dedicated Schools Grant cumulative deficit to be carried forward was projected at £78.4 million, though recent improvements had been acknowledged in a letter from the Department for Education.

The Cabinet Member also recommended capital budget adjustments to support housing acquisitions.

The Leader of the Council acknowledged the financial pressures facing local authorities and welcomed the anticipated fair funding formula, stressing the need for it to address the unique burdens faced by Hillingdon.

Alternative options considered and rejected

None