Agenda item

The Corporate Director for Residents’ Services, Dan Kennedy, presented the Month 7 budget and spend report. Other officers in attendance to respond to Members’ questions were Steve Muldoon - Corporate Director of Finance, Matt Davis - Director – Strategic and Operational Finance, Ceri Lamoureux - Head of Finance and Bernard Ofori-Atta - Head of Finance.

It was reported that the projected net overspend for services within the remit of the Residents’ Services Select Committee stood at £7.8 million; a figure that had remained largely unchanged since Month 6. The pressures contributing to this position had been driven primarily by homelessness demand, which had been reported previously to the Committee.

It was explained that a number of proactive measures had been undertaken during the year. One notable initiative involved efforts to control temporary accommodation expenditure through the introduction of caps and other controls. This initiative had produced an estimated cost reduction of nearly £8 per unit, per night, amounting to just over £2 million in cost avoidance for the year. Despite this, the overall situation had remained exceptionally challenging, particularly in relation to securing accommodation in the private rented sector and accessing other forms of affordable or social housing. These challenges had been exacerbated by high levels of demand, including increased evictions from private rented homes, evictions by friends and family, and presentations from households fleeing domestic abuse.

Members were informed that a series of proposals had been set out in the subsequent agenda item to address these pressures, including growth proposals, budget rebasing and a range of further initiatives planned for the next year. These would include new efforts to secure private rented accommodation, continuation of the year’s ambitious programme to acquire additional social rented properties, and partnership work with housing associations to increase supply. It was acknowledged that these efforts were operating in a highly challenging environment, consistent with the experience of other London boroughs and local authorities nationally. It was emphasised, however, that activity would continue and innovation would be pursued wherever possible.

It was also reported that the Housing Revenue Account was projecting a breakeven position and that reserves had been maintained at £15 million, which was considered positive. The Committee was advised that, of the £11.7 million savings target within its remit, £5.6 million (around half) had been banked and were on track to be delivered. A further £3.5 million (around 30%) had been classed as amber and were expected to be delivered, though possibly not fully within the current financial year. It was noted that some savings were deemed undeliverable and would be written out of the budget, with several identified as legacy targets no longer achievable.

Councillors referred to page 20 of the report, noting a £0.9 million shortfall in garden?waste subscription income as of Month 7. Clarification was requested on whether the shortfall had increased between Months 6 and 7 or whether the position had stabilised, allowing a more reliable full?year forecast.

In response, it was explained by officers that the position had largely stabilised. Income was reported at approximately £1.6 million, against the original £2.5 million target. Officers stated that, as the service had been a new subscription scheme introduced part?way through the year following consultation, income estimates had been based on the best available benchmarking from other boroughs. It was added that schemes of this nature tended to mature over two to four years, with steady growth expected before levelling off.

Members asked how the identified shortfalls, including slippages and undeliverable savings, were being mitigated. It was stated that the report outlined the figures but not the associated improvement plan, and further detail was requested on actions being taken, how replacements for undeliverable savings would be identified, and how mitigation would be monitored.

Officers responded that some savings targets would never be achievable and were therefore being rebased, as shown in the next agenda item. It was explained that a wide range of control measures had been introduced corporately, including spend controls requiring panel approval for expenditure over £500, strengthened contract compliance, and recruitment controls. These measures were described as significant mitigations. It was emphasised that, in demand?led statutory services, total elimination of pressures was not possible; instead, actions focused on reducing overall costs rather than preventing expenditure outright. Officers noted that further detail could be provided outside the meeting if required.

Councillors observed that detailed information would help the Committee scrutinise trends more effectively. Clarification was sought regarding the effect of recruitment controls on day?to?day operations, and concern was raised about references to redundancies. They asked what assessments had been undertaken regarding the impact of such actions on service delivery.

It was explained that all service changes were subject to scrutiny by senior officers, finance and HR, as well as the corporate management team. It was confirmed that the Council’s priority was to maintain frontline services and statutory duties. Any proposed changes underwent an equalities impact assessment. Officers reported that recruitment?related adjustments were largely driven by redesigned ways of working and efficiencies, with an emphasis on collaborative working rather than reducing service provision.

The Committee requested an update on homelessness, including the number of households in emergency accommodation, the scale of pressure, associated costs, and whether any levelling?off was expected. In response, it was reported that approximately 1,800 households were in temporary accommodation, with around 800 placed in higher?cost nightly or spot?purchased provision. It was confirmed that the Council had negotiated firmly with providers and introduced caps, achieving reduced costs. The challenges were described as significant and largely outside the Council’s control, including unexpected arrivals through Heathrow and sharply rising private?sector rents, with some families facing increases of £400–£500 per month. Officers stated that mitigation efforts included persuading landlords to retain tenants, identifying alternative accommodation, expanding acquisition programmes, and developing new models for housing supply. It was reported that more than 200 additional homes for social rent would be acquired during the year. The underlying issue was described as one of affordability, with many families either unable to enter or unable to remain in the private rented sector.

In response to their questions regarding the high overspend and final forecast variance and whether these were attributable to a lack of new housing supply and slow delivery of new homes, Members were advised that turnaround times for existing Council stock were generally strong and that further opportunities were being explored to maximise the use of available stock, including downsizing incentives. It was reported that significant investment was being made in new schemes such as Hayes Town Centre and Avondale. However, lead?in times for new developments and market stagnation—particularly the reluctance of developers to proceed with blocks of flats unless a full sell?through was achievable—were described as constraints. When asked whether homelessness applications had continued to rise, officers reported a stable but high volume of 100–120 applications per week.

Members sought clarification about the sustainability of reducing revenue contributions to capital schemes in order to maintain HRA balances, referencing page 21 of the report. Officers responded that the arrangement was sustainable and formed part of the budget’s design. It was stated that the revenue contribution acted as a balancing mechanism and that the changes involved relatively modest amounts within the wider financial framework.

Councillors referred to the cost of the waking?watch service and asked whether a phased exit plan existed, noting that the report lacked such detail. In response, it was confirmed that the report before the Committee represented a snapshot of the financial position rather than an in?depth thematic report and that more detailed reporting could be provided separately. It was explained that the waking?watch arrangement had been introduced to prevent residents in affected private accommodation from being required to leave their homes following a likely prohibition notice from the London Fire Brigade. Officers confirmed that the Council had incurred unavoidable costs but reported that the Council was now close to exiting the waking?watch arrangement, subject to final sign?off.

RESOLVED: That the Select Committee:

1.    Noted the budget monitoring position as of October 2025 (Month 7) for the Council; and

2.    Noted the budget monitoring position as of October 2025 (Month 7) for the services within the remit of the Residents’ Services Select Committee.