Agenda item

This report provides an update on the overall preparation and proposals for the 2025/26 revenue budget, risks, financial resilience, and the impact of those proposals.

This report also sets out the budget proposals for the Housing and Homelessness services covered by this Policy and Accountability Committee.

Revenue Budget

Councillor Rowan Ree (Cabinet Member for Finance and Reform) gave an overview of the 2025/26 Revenue Budget, including the operating environment, additional central government funding and objectives of the financial strategy. He also briefed members on the budget headlines, the provisional settlement of the draft budget and departmental service allocations, the investment and savings proposals, council tax considerations and residual risks in 2025/26.  He further highlighted the earmarked reserves forecast and medium-term financial forecast showing the estimated budget gap until 2028/29 as well as the MTFS for 2026/27+. Councillor Ree said the Revenue Budget would be presented to the Cabinet and Full Council in February 2025 after briefing the Policy and Accountability Committees and Policy Oversight Board.

Sukvinder Kalsi (Executive Director of Finance and Corporate Services) highlighted the positive comments of the External Auditor that the Council had attained two green (no significant weaknesses in arrangements identified or improvement recommendation made) and an amber (no significant weaknesses identified, but improvement recommendations made) ratings in terms of financial sustainability, governance and value for money (i.e. improving economy, efficiency and effectiveness). This had provided independent assurance to Committee members, residents and other stakeholders about how well the Council had managed its finances.

NOTE: The presentation slides are attached in Appendix A

Noting Hammersmith & Fulham (H&F) had maintained third lowest Council Tax in the country and continued to provide comprehensive Council Tax support to eligible residents while delivering core services, the Chair was concerned how this was achieved when some local authorities were liaising with the central government about emergency funding.

Sharing the same views, Councillor Asif Siddique said residents who noted some councils were struggling from bankruptcy would like to know how the Council had brought about this balanced budget where the essential services were maintained with further investment of £12.3m for growth spending, efficiency saving of £5.1m and a healthy reserve of £73.5m.

Councillor Ree noted H&F might have some of the highest land prices in the country but it also had huge areas of deprivation. He remarked that the achievement was made possible through being ruthlessly financially efficient practised by every Cabinet Member and officer who continued to focus on bringing the outcomes for residents as efficient and effective as possible. Every department was doing its utmost to put all resources to most effective use. He stressed that it was not easy to get a balanced budget which took them a long time to go through the council’s spending line by line to ensure each of them was used efficiently. On Council Tax, Councillor Ree explained that to make the regressive tax regime fairer, the Council had kept Council Tax as low as possible and set the maximum discount at 100% so that the most vulnerable paid nothing at all.

Councillor Adronie Alford sought clarification as one of the key investment proposals for 2025/26 included £3.4m for community safety and social inclusion (page 16) but the figure was larger for a similar item in the presentation. Separately, she considered it a better way of scrutiny for having the papers in advance to prepare the questions.  It was not effective for members to look at the screen and write notes while listening to the presentation.

Councillor Ree explained that the information was all in the report had she taken time to read it and clarified the difference in the figures was because the larger figure included £120,000 investment in measure to educate residents about fraud, the fastest growing crime in the UK.   

Housing Solutions

In terms of ruthless financial efficiency, Councillor Ree said he hoped to put this into reality in tackling homelessness. He expressed concern that homelessness had been an ongoing and aggravated issue with the number of cases going up continuously in the last 15 years without any joined-up solutions by the former central government.  It had become a huge challenge to local governments and cost London councils as a whole as much as £4m a day. He looked forward to the solutions put forward by the current central government which was conducting a consultation to deal with this prolonged problem and this Council would certainly provide its views.

Sukvinder Kalsi presented the Housing Solutions under the Medium-Term Financial Strategy, including the strategic service context (service and financial considerations), the number of homelessness approaches since 2019/20, a budget overview 2025/26 with gross budgeted expenditure/income of £45.4m/£17.7m, key budget changes from £13.4m in 2024/25 to £15.7m in 2025/26 and investment & efficiencies for 2025/26+. Sukvinder then outlined the key objectives of the action plan and strategy for homelessness and the key risks involved.

NOTE: The presentation slides are attached in Appendix B

Councillor Frances Umeh (Cabinet Member for Housing and Homelessness) remarked that to tackle homelessness due to lack of available supply, the Council was committed to building more than 3000 new affordable and energy efficient homes over the next few years while looking for more affordable supply from the private rented sector (PRS).  She noted the London councils’ funding gap of nearly £100m in 2023/24 in terms of local housing allowance would enable local councils to provide more supply within the PRS.

Noting that the investment proposals included £1.2m for Homelessness, in addition to a further £3.5m from the Homelessness Prevention Grant and inflationary uplifts, the Chair was concerned whether there were other areas earmarked for this spending.

Councillor Umeh confirmed that the £1.2m was dedicated spending that would cover all the work of the Homelessness teams from finding homes within the PRS, paying for the rent to providing help and support to the homeless people. Richard Shwe (Director of Housing) added that the investment would mainly be used for work on homelessness prevention which was one of the stipulations in the new government grant.  For example, the Homelessness team would seek to reduce families in bed and breakfast by providing extra support focusing on their needs so that they could have a normal family live. 

The Chair expressed appreciation on the preventive initiatives which shall help stop the escalation of demand.

Given the number of homelessness approaches was predicted to rise as a result of the passage of the Renters’ Rights Bill, Councillor Siddique considered the extra £1.2m might be used to tackle homelessness by running more daycare centre services as they were less costly.

Richard Shwe noted that daycare centres were under the remit of adult social care and the Council had been lobbying other London councils for temporary accommodation for homeless people from the borough. The additional support funding stream would mainly be used for preventive measures implemented in collaboration with the voluntary sector which had given detailed briefings about their work at the last Committee meeting.  

Councillor Alford referred to a service gap as noted from a recent case. The residents who, having been receiving housing support service, felt rather lost after being declared homeless and passed from that team.   They were not aware that the Council had moved them onto the next stage and received notification only a day before needing to move into the assigned temporary accommodation. They found the rent unaffordable and had no idea about the Council’s assistance to be provided.

Councillor Umeh appreciated the feedback and undertook to take the reflections on board. She considered it was necessary for the team to ensure more effective communication with the homeless people and manage their expectations by informing them the process and their current position.  The Housing team was committed to looking for a more permanent solution that ranged from creating a detailed housing plan with clear pathway, timeframe and options into permanent housing to ensuring the individuals’ expectations could be effectively managed.

Councillor Alford asked how far out the out-of-borough temporary accommodation were.   Councillor Umeh depicted the different challenging circumstances experienced by people facing homelessness.  It was imperative to provide stable temporary accommodation locally for people being served last minute eviction notice by the landlord. For people becoming homeless due to domestic violence, they should be accommodated in safe housing away from the original neighbourhood. Richard Shwe added that the linkage of the temporary accommodation to the transport hubs would also be taken into consideration.

RESOLVED

1. That the Committee noted the budget proposals and agreed to make recommendations to Cabinet as appropriate.

2. That the Committee noted the proposed changes to fees and charges and agreed to make recommendations as appropriate.