Agenda item

This report provides an update on the overall preparation and proposals for the 2026/27 revenue budget, risks, financial resilience, and the impact of those proposals.

Councillor Rowan Ree (Cabinet Member for Finance and Reform) introduced the item and presented the corporate budget overview to the Committee. He mentioned that the joint meeting between Children’s and Adult’s Services was indicative of the internal reorganisation that had led to efficiencies within the departments. He explained that the 2026/27 budget needed to be taken in the context of the recent Autumn Statement from the Government, as well as a changing Demographic with Hammersmith and Fulham (H&F). He added that the Fair Funding Review was now a three-year settlement and that there was expected to be budgetary pressures due to this from 2027/28.

Jacqui McShannon (Executive Director – People), Tony Burton (Head of Finance – People) and Prakash Daryanani (Head of Finance – Adult Social Care) presented the directorate specific budget presentation. Jacqui McShannon explained that his was the first time that the People’s directorate had presented their budget after the reorganisation, as Children’s and Adult’s Services were previously separate. She stressed the importance of partnerships in their work and the setting of the budget. Tony Burton presented the Children’s Services budget and explained that of the £51m allocated to Children and Young People Services, 42% was Statutory settled and loving care arrangements for Children Looked After, 31% was Providing statutory intervention to safeguard children, and 11% prep for adulthood for care leavers. There was £76m allocated to Education and SEND, 57% of this was Statutory SEND and Inclusion, 28% Early Years Entitlements and 9% Disabled Children Short Breaks. Prakash Daryanani presented the Adult Services budget. The main changes from 2025/26 were a £3.56m increase in the budget for 2026/27, other changes involved the Fair Funding Review and Savings. The Adult Social Care budget for 2026/27 was £123m, 33% was for Residential and Nursing Placements, 16% Home Care and 12% Care Management & Assessment. £28m was allocated for Public Health, 30% was for Public Health Investment Outcome, 20% Substance Misuse Services and 19% Sexual Health.

Councillor Natalia Perez (Chair of Health and Adult Social Care Policy and Accountability Committee) noted that the Committee had been presented a balanced budget, which protected reserves and had £9.5m of efficiencies, without cutting services.

Councillor Jackie Borland mentioned that H&F had an aging population as a borough and asked if there was any mitigation in the budget for the increase in demand for services that this could cause. Sarah Bright (Director - Commissioning Transformation and Health Partnerships) explained that they were working on how they would meet residents' needs in the future by taking learning from how residents saw themselves in older life. She added that early intervention and prevention was key as well as working in partnership with residents. She mentioned that new technology was being introduced constantly and this would lead to new opportunities. Jacqui McShannon added that it was important to look at the pattern of uptake for services, as some services were becoming less popular over time.

Councillor Borland asked whether being proactive and looking for opportunities for early intervention, was financially beneficial. Dr Mayada Abuaffan (Director – Public Health) explained that by being proactive, we could help slow the aging process through exercise, healthy eating and better sleep. She told the Committee that prevention was a 5-7 year process but it was cheaper than being reactive.

Councillor Lydia Paynter referred to Direct Payments, the presentation had mentioned that H&F were to optimise the use of Direct Payments, she asked how this was being rolled out. Jacqui McShannon clarified that the uptake for Direct Payments at H&F had been low, lower than the London average, and they had set targets to increase this by commissioning a local provider to work with residents. H&F were now above the London average.

Lucia Boddington (Co-Optee) mentioned independent advocates and asked whether all residents had access to this service, how many there were and how readily available they were. John Morley (Director – Adult Social Care) explained that they could provide further information on this after the meeting.

                                                                                  Action – John Morley

Jim Grealy (Co-Optee) referred to H&F’s aging population, he mentioned that there were low birth rates in the Borough, and that it was hard to recruit and retain care staff. He agreed with Dr Abuaffan regarding comments that early intervention was good, but he asked what could be done in the meantime as prevention took time. Jacqui McShannon commented that they wanted to help residents choose and control what they wanted services to do for them. John Morley explained that the long-term solution was to work in partnership, he gave an example of aligning with the NHS 10-year plan.

Jim Grealy mentioned that the ICB had cuts and that this could lead to additional pressure on Local Authorities (LAs). He added that hospitals had been saying that they had wards full of patients that were ready to be discharged, but that LAs didn’t have the capacity to look after these people. He commented that this was a huge cost to the LA. John Morley explained that if H&F could work more closely alongside the NHS, this would benefit both parties.

Nandini Ganesh (Co-Optee) noted comments regarding working closer with other LAs and the ICB and said this was good to hear but asked whether this was realistic. Sarah Bright accepted that it was challenging as there were inconsistencies across Boroughs regarding the way they worked. She added that there were economies of scale when working with other LAs.

Nandini Ganesh mentioned contracts that were coming to tender and asked whether they would contribute to cost savings and give greater choice to residents. Jacqui McShannon explained that the tender process was resident informed but that it was a private process and therefore officers could not provide further information currently.

Councillor Alex Sanderson (Deputy Leader) commented that the ICB had met with LA colleagues. She added that the ICB needed to work effectively with LAs. She told the Committee that there was not much clarity regarding how the ICB wanted to work following the upcoming changes, but H&F hoped to have some influence.

Councillor Natalia Perez mentioned that the People directorate integration had allowed for innovation and asked for the next steps in the integration process. Jacqui McShannon explained that they would continue to focus on partnerships and early intervention as well as continuing to transform services.

Nandini Ganesh mentioned the Dedicated Schools Grant (DSG) statutory override and asked whether the deficit would now be reflected in the budget as the statutory override was due to end in March 2026. Tony Burton explained that the statutory override had been extended until March 2028.

Councillor Aliya Afzal-Khan also mentioned the DSG deficit and particularly the 1% block transfer request, she asked how H&F would ensure the sustainability of SEND provision and that maintained schools are not asked to pay more. Peter Haylock (Operational Director – Education and SEND) noted that SEND growth was high nationally, but that H&F’s was below the average. He added that as well as a growth in diagnosis, there was a growth in complexity. He explained that it was important to meet more need locally, rather than transporting people across London, H&F had opened 3 SEND units and planned to open 2 more in 2027, to increase local capacity. Regarding the 1% block transfer Peter Haylock told the Committee that the High Needs Block was underfunded by £2.7m which had a negative effect on the schools, this was why the schools supported the 1% transfer. Councillor Aliya Afzal-Khan asked that when maintained schools were contributing money, was it was going back to them in another way. Peter Haylock confirmed that this was the case.

Councillor Aliya Afzal-Khan asked what progress had been made in regard to implementing the Safety Valve Plan. Jacqui McShannon confirmed that H&F had made its last return on the Safety Valve and this had mitigated an £8m overspend.

Councillor Aliya Afzal-Khan commended officers work across 2025/26. She mentioned that there was growth in travel care and asked what the projected increase in travel costs was expected to be over the next year. Jacqui McShannon explained that growth had slowed down and that travel costs would come down as more SEND units were being opened locally.

Councillor Aliya Afzal-Khan asked about the capital programme and whether there was a detailed list of all projects regarding school refurbishment and repairs. Tony Burton confirmed that there was a significant capital plan that included work commissioned by H&F as well as work that took place using DfE grants for SEND provision. Councillor Aliya Afzal-Khan questioned whether H&F had bid to the DfE for extra grants to expand the capital programme. Tony Burton explained that some grants were on a formulaic basis and that some grants were bid for through the Safety Valve process.

Nandini Ganesh asked officers whether H&F received any income because there were pupils attending schools within the Borough that lived outside the Borough. Tony Burton confirmed that this was the case and that it came through two funding streams. One was through the High Needs Block of the DSG as there was an adjustment if a LA was a net importer of pupils. The second was that the LA where the pupil lived paid the top up to the school for the extra cost of SEND provision.

Nandini Ganesh questioned whether there was still an issue with falling rolls within schools in H&F. Peter Haylock confirmed that overall, this was still an issue, but early indications were that there was a slight improvement in primary school rolls for the next academic year.

Councillor Aliya Afzal-Khan sought clarity on the funding allocated for expanded family hubs. Tony Burton clarified that there was both Government investment and investment made by H&F in prior years. Peter Haylock added that H&F were to also receive £600k in funding from the Government in April 2026 to implement the best start in life plan. Tony Burton confirmed that the ongoing investment in family hubs was £1.25m.

RESOLVED That:

1. Health and Adult Social Care PAC and Children and Education PAC considered the budget proposals and made recommendations to Cabinet as appropriate.

2. Health and Adult Social Care PAC and Children and Education PAC considered the proposed changes to fees and charges and made recommendations as appropriate.