Waltham Forest Council is facing a significant financial challenge, grappling with a £24.5 million budget pressure, according to a recent report presented to the Budget Scrutiny Committee. This pressure is largely driven by rising demand for social care services and temporary accommodation needs within the borough.
The report, which reviewed the council's capital and revenue expenditure for the 2024-25 financial year, revealed a significant overspend in key service areas. To come back to a fully balanced position a drawdown of £2.656 million has been made from the Budget Strategy Reserve. Strategic Directors are exploring changes to service delivery that will reduce demand pressures in the future and efficiently manage the pressures that they are experiencing, according to the Public Reports Pack.
High demand for adult and children's social care, driven by cost increases, has led to a combined overspend of £15.182 million. Expenses for temporary accommodation exceeded the available budget by £9.042 million. The use of commercial hotels for urgent cases resulted in an overspend of £4.367m (at a nightly cost of £120, compared to £66 for the recently leased London Walthamstow complex). Self-contained placements gave rise to a combined overspend of £4.547m.
The final outturn position for service directorates showed an unfunded budget pressure of £24.458 million, a notable increase compared to previous periods. This includes a £3.686 million increase compared to the Month 9 service position of £20.772 million, and a £6.095 million increase compared to the final outturn position for 2023/24 of £18.363 million.
Despite these pressures, corporate expenditure saw an underspend of £14.560 million, primarily due to an underspend on the contingency budget, a prepayment discount on pension contributions, and a reduction in the bad debt provision for housing benefit overpayments. The Housing Revenue Account (HRA) achieved a surplus of £1.388 million, which was transferred to the general HRA reserve. However, the Dedicated Schools Grant (DSG) had an in-year deficit of £4.454 million, mainly in the high needs block, driven by cost increases far outweighing increases in funding allocations.
The approved capital budget for 2024/25 was £151.018 million, with actual spending at £131.798 million. The underspend of £19.220 million will be carried forward into 2025/26. The key areas of slippage are Housing Delivery HRA (£13.877 million), Housing Assets HRA (£2.489 million), Housing General Fund (£1.540 million) and Property (£1.563 million).
The general fund working balance at year end was £14.906 million, meeting the target of having a balance between £10 million and £15 million. The HRA working balance has increased to £6.905 million as at 31st March 2025.
