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 services covered by this Policy and Accountability Committee.

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+. He said the Revenue Budget would be presented to the Cabinet and Full Council later this month having completed all briefings of the Policy and Accountability Committees and Policy Oversight Board. Councillor Ree expressed his gratitude to all Cabinet Members and officers who had worked professionally going through the budgets line by line to make sure every penny counted. Their brilliance efforts shall continue in maintaining the balanced budget in future statements of accounts throughout the years.

Kellie Gooch (Head of Finance – Place) gave a presentation on the budget relevant to this PAC, including the achievements in the past year, the key budget changes in investment (in respect of VAWG, LET, GVEU, digital inclusion strategy and inflationary uplift) and savings as well as the budget risks.

NOTE: The presentation slides are attached in Appendices A & B

The Chair asked the following question on behalf of Councillor Andrew Dinsmore:

“My key question is that I have not been provided with a copy of the full accounts so I cannot ascertain what has been cut from the general budget to feed into SICS PAC or whether all of the increase is due to additional revenue from the 2.99% increase in council tax? I would be grateful if a copy of the accounts and/or an explanation on this point could be provided.” 

Councillor Ree noted that Cllr Dinsmore seemed to be a little confused about the process, as the budget was a forward-looking document for the financial year ahead, whereas the accounts were published at the end of the financial year. He pointed out the relevant budget information was all available in the report and presentation he had just given. He said he was happy to provide the information in writing if necessary. At this juncture, Councillor Lucy Richardson expressed her appreciation on the impressive balanced budget in particular the investment in housing.

Noting that the additional external income for CCTV services amounted to £30,000, the Chair sought elaboration. Councillor Ree remarked that the request of Westminster City Council to use the services did reflect the high regard of the current user of the Royal Borough of Kensington and Chelsea (RBKC). He noted H&F’s CCTV network was very impressive and recommended members to pay a visit to the control room when there was an opportunity.  Councillor Ree said the Council was keen to explore and generate further revenue from the CCTV services.

Councillor Richardson referred to the efficiency savings and asked about how service effectiveness was assessed and monitored and who made the decisions. Sukvinder Kalsi (Executive Director of Finance and Corporate Services) assured that in addition to assessment by national or London-wide regulators, Council services were also scrutinised by the External Auditor and subject to internal audits benchmarking those spending in other councils.  For services not applicable under the governance checks, they would be assessed based on residents’ feedback.

In reply to Councillor Richardson’s further question about digital inclusion strategy, Sukvinder Kalsi noted the new investment aimed at addressing digital barriers for residents and services by, among other things, strengthening infrastructure and operating systems to ensure residents were digitally engaged inclusively. He added that the strategy also aimed at reducing resident vulnerability to cyber security.  While noting that digital inclusion was a regular item on the agenda of the Policy and Oversight Board, Sukvinder agreed to provide more details about the baseline survey conducted among residents.

ACTION: Sukvinder Kalsi

The Chair noted the additional budget investment included £250k investment in VAWG and asked for the use of the extra funding. Neil Thurlow (Director of Public Protection) highlighted the challenging position of the work around VAWG.  As the most committed crime with rising number of victims, the cost for delivering the services was also increasing especially if refugees were involved like a number of them in this Council. The Council paid fairly to retain the best providers who sought to engage in special training to improve the outcomes. Neil also noted that some of the extra funding were used to meet the legal costs of the court cases, spiking inflation, rising interest and cost of living.

The Chair noted the previous reliance on external funding for LET and Gangs Unit would be removed from 2025/26 onward and asked about the other Council priorities that would be supported by the repurposed external funding. Councillor Ree said the fund in the pot would be for general use.  Sukvinder Kalsi added that the fund might be used to meet needs arising outside the budget across the Council such as environmental programmes or community activities.

Responding to the Chair’s enquiry, Sukvinder Kalsi noted that the Council’s Local Support Payments scheme of £600,000 was designed to help the housing needs of residents facing emergencies or crises. This service was currently administered by RBKC, and a saving of £150,000 was included in the 2025/26 budget to be delivered by bringing this service in-house and reducing administration costs.  Councillor Rebecca Harvey (Cabinet Member for Social Inclusion and Community Safety) recalled that the tri-borough arrangements in administering local social funds was a legacy agreed in 2013 by the previous Administration.  She considered it much more efficient and effective by running the service in-house for vulnerable residents. 

The Committee noted the report.