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. In addition to the slides attached, a further presentation on the Housing General Fund will delivered at the meeting.

Councillor Rowan Ree (Cabinet Member for Finance and Reform) introduced the item and presented the Corporate Budget Overview to the Committee. 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. Sukvinder Kalsi (Executive Director – Finance and Corporate Services) introduced the directorate specific presentation. He highlighted that demand for homelessness services had continued to rise amid a shortage of available social and affordable housing, compounded by the ongoing cost?of?living pressures, inflation, increased interest rates, and the resulting strain on household incomes. He mentioned that homelessness approaches had peaked at 3,600 in 2023/24, with a projected 2,900 in 2025/26. The budget stood at £51.3 million, including £30.5 million for temporary accommodation procurement, £4.5 million for housing solutions staffing, £7 million for corporate support charges, and £3.6 million for supported housing, set against an income of £29.9 million. Key financial changes included £1 million attributed to inflation, £1.2 million in savings requirements, and £4.8 million arising from depreciation and support charges.

Councillor Adronie Alford referred to the corporate overview presentation and specifically the savings proposal of reducing arrears. She asked how this was going to be achieved. Councillor Rowan Ree explained that the aim was to increase Council Tax collection rates to 98% by identifying more people that should be paying Council Tax, that currently weren’t. He added that some residents were not aware that they were no longer eligible for discounts on their Council Tax, so the Council would support those residents, and others, with their ethical debt collection policy.

Councillor Adronie Alford raised concerns regarding the Housing Company and wanted to ensure that the properties within the company were not too expensive. She questioned the management of the Housing Company and asked whether leases would be moving from Council leases to Housing Company leases on an SLA? Sukvinder Kalsi confirmed that the current team would be assigning leases to the Housing Company. He explained that the Housing Company was a general fund company for the Council and therefore H&F could claim more local housing allowances. Councillor Adronie Alford sought clarification that this change was to allow H&F to work around caps on the funding brought in from the Government and if this was the case, whether the Government were likely to allow this. Sukvinder Kalsi confirmed that this was the case and that other Local Authorities (LAs) had already been doing this.

Councillor Adronie Alford asked how large families currently placed in bed and breakfast accommodation would be housed in the longer term. Richard Shwe (Director of Housing) explained that the service was actively exploring options, including commercial opportunities and partnerships with hotel businesses. In response to a further query from Councillor Alford, he confirmed that some hotels could be reprovisioned as flats and that whole blocks could be developed for this purpose.

Councillor Jacolyn Daly (Chair) asked for further information about the Fair Funding Review and the challenges it posed. Councillor Rowan Ree outlined how the Government allocated funding between councils, noting that the formula used took many metrics into account but had not fully reflected levels of deprivation. He added that this meant some of the challenges faced locally were not appropriately represented. Councillor Jacolyn Daly asked whether issues arising from the 2021 Census had contributed to discrepancies, and Councillor Rowan Ree confirmed that the Census had been conducted during the pandemic, affecting where people were living at the time, including people staying temporarily with relatives outside London.

Councillor Asif Siddique asked whether there was scope for a discretionary fund to be allocated. Councillor Rowan Ree advised that the council was pursuing this and that there would be a meeting with the Secretary of State to raise the issue. Councillor Adronie Alford asked how receptive the Government had been to Hammersmith and Fulham’s position, and Councillor Rowan Ree stated that the Secretary of State, being a former London council leader, understood the challenges faced by London boroughs.

Councillor Jacolyn Daly sought further information regarding the £1.2m saving associated with the Homelessness Reduction Strategy. Councillor Frances Umeh (Cabinet Member for Housing and Homelessness) explained that this reflected the work of the teams within both the Housing General Fund and the Housing Revenue Account, and that efforts were being made to identify efficiencies. She noted that the council continued to consider ways to mediate with landlords. Richard Shwe added that the service had reduced from two heads of service to one, enabling a more integrated approach to prevent homelessness. Teams were now better placed to work together and provide coordinated support, asking more targeted questions to understand residents’ needs. He explained that housing standards sat within the broader housing function and that a combined operation enabled closer engagement with the private rented sector and more proactive work.

Councillor Laura Janes asked for further detail on private?sector business opportunities. Richard Shwe advised that the council was lobbying the Government internally to access new grants and was also developing work with the private rented sector in relation to homelessness. Councillor Janes requested that the committee return to this topic at a later meeting.

Councillor Janes requested that the presentation slides be circulated and attached to the minutes, and Councillor Alford confirmed her agreement.

Councillor Janes then asked what circumstances might lead the council to revert to placing families in bed and breakfast accommodation. Richard Shwe confirmed that the council was maintaining its standards by seeking appropriate temporary accommodation for families, as opposed to bed and breakfast.

RESOLVED That:

1. The Committee noted the update.