Brent Council faces £9m budget overspend as financial forecast reveals significant pressures
Brent Council is projecting a £9 million budget overspend for the current financial year, according to the latest financial forecast presented to the council's Cabinet. While this represents an improvement of £0.5 million since the previous quarter, the council is implementing a range of mitigating actions to address the remaining deficit.
The Quarter 2 Financial Forecast for 2026/27 highlights significant shortfalls across several key areas. Residents and Housing Services is projecting a substantial £7.7 million overspend, largely attributed to increased demand for homelessness services and a shortage of affordable private rented sector accommodation. The Dedicated Schools Grant also faces an in-year deficit of £20.8 million due to pressures in providing for children with Education, Health and Care Plans.
Councillor Gwen Grahl, Deputy Leader and Cabinet Member for Finance & Resources, acknowledged the challenging financial position. The forecast £9 million General Fund overspend reflects significant pressures on local government services,
she stated, highlighting the substantial overspend within Housing Needs and Support where rising homelessness and increased accommodation costs are key drivers.
Specific pressures and mitigating actions
The £1.6 million overspend in Service Reform and Strategy is primarily driven by overspends in Adult Social Care (£1.5m) and Strategic Commissioning (£0.8m). The report elaborates that demand for social care services is increasing due to people living longer, an increasing complexity of needs, and rising market prices, leading to higher costs for care packages. For adults with learning disabilities, there has been an increase in demand for homecare and day services, with day service costs rising by 16%. For mental health clients, there has been an increase in demand for more complex residential and nursing placements.
To address the budget pressures, Brent Council is implementing a multi-faceted approach. Beyond general spending controls, vacancy management, and tighter controls over agency expenditure, directorates are being required to identify additional in-year savings, cost avoidance measures and opportunities to reduce expenditure wherever possible.
Since Quarter 1, directorates have already identified £2.7 million in in-year savings, which are helping to offset budget pressures.
Addressing the housing crisis
The shortage of affordable Private Rented Sector (PRS) accommodation is a significant driver of the housing overspend. The council's strategy includes increasing the supply of council-owned homes to alleviate pressures on temporary accommodation. They are also exploring options for leasing new accommodation and have an acquisitions program through I4B Holdings Ltd to acquire street properties for homeless families. Furthermore, the council is renegotiating contract prices with providers and identifying alternative solutions to relocate high-cost cases. However, the strategy for directly addressing the shortage of affordable private rented sector accommodation itself is not explicitly detailed beyond these measures.
Dedicated Schools Grant deficit and SEND provision
The council has submitted its local SEND Reform plan to the Department for Education in support of its application for High Needs Stability Grant funding to address the £20.8 million deficit in the Dedicated Schools Grant. This plan will be subject to ongoing monitoring and review by the DfE, NHS regional SEND leads, and specialist advisers. The council also received a £2.1 million increase in Revenue Support Grant, which has been used to establish a dedicated reserve to fund the council's share of the historic DSG deficit not covered by government support.
Long-term financial implications
Despite the mitigating actions, the council faces ongoing challenges, including rising inflation, increased demand for social care services, and the cost-of-living crisis impacting residents. The report noted that the council is continuing to manage its financial position responsibly and is taking steps to deliver essential services within available resources. However, any overspend not dealt with in 2026/27 could potentially carry over into the following year, therefore increasing the requirement for further savings whilst at the same time depleting the Council's reserves.
The Housing Revenue Account has a forecast outturn of £3.5m overspend, and considerable savings and careful financial management remain necessary to maintain a balanced budget.
The long-term implications beyond these immediate concerns are not detailed.
In addition to the General Fund overspend, the Housing Revenue Account is forecasting a £3.5 million overspend, and the Capital Programme is forecasting an outturn of £258.1 million against a revised budget of £267.7 million.
Cabinet endorsed the budget changes and approved virements set out in the report, while noting the prudential indicators for treasury management and the savings delivery tracker. The full details of the financial forecast can be found in the Public reports pack for the Cabinet meeting on Monday 12 October 2026 Public reports pack Monday 12-Oct-2026 10.00 Cabinet.pdf.