Waltham Forest is grappling with a significant budget overspend of £31.4 million, according to a recent report presented to the Budget Scrutiny Committee. Like many other local authorities, Waltham Forest faces increasing demand and costs in key service areas, including temporary accommodation, adult social care, children's services, and special educational needs and disabilities (SEND).
The overspend, revealed at the committee's meeting on Wednesday, September 3rd, 2025, stems primarily from these increasing demands, complexity, inflation and market challenges. The overspending service areas are subject to specific reviews with the objective of reducing the anticipated costs pressures with mitigating actions. The delivery of initiatives to reduce these pressures are managed via the Transformation Programme.
The report highlighted that the number of households in temporary accommodation has surged by 26% in the past year and a staggering 82% over the past two years. This increase is putting immense pressure on the council's Housing General Fund, which is forecasting an overspend of £14.55 million.
Adult social care is also facing significant challenges, with a rise in the number of clients requiring external care homes or services. Children's services are projected to overspend by £11.062 million, driven by rising costs for children's care and placements, Section 17 spending, and legal/staffing pressures. The SEND area is forecast to overspend by £9.334 million, largely due to increased demand for support packages and delays in transitioning young people to adult services.
The Budget Scrutiny Committee, led by Councillor Miriam Mirwitch, reviewed the Medium Term Financial Strategy (MTFS) for 2026/27 – 2028/29 and the Budget Monitoring 2025-26 (Month 3) reports. The MTFS report stated that the council must set an annual balanced budget and submit budget returns to the Ministry of Housing, Communities and Local Government (MHCLG).
The report also stated that the Bank of England anticipates that the Consumer Price Index (CPI) is likely to increase temporarily to 4% in September from the current position of 3.8% at July and therefore still exceeding the Bank's target of 2%.
The report stated that the month 3 revenue projection is a forecast overspend of £31.412 million, with overspends in Adults and Children's Social Care, Special Educational Needs and Disability (SEND), Temporary Accommodation and Property costs (income and compliance).
The report stated that the forecast overspend assumes that all planned budget and management action savings will be delivered in full. Any unfunded pressures for 2025/26 will initially be funded from potential corporate underspends and then from reserves. The Council maintains a Budget Strategy Reserve (BSR) to allow it to manage risk and smooth out any fluctuations in government funding from one year to the next.
The committee discussed potential measures to address the overspend and ensure the council's financial stability. The report outlining the MTFS stated that the Council will prioritize actions that deliver the greatest value to residents, supported by strong leadership, digital innovation, and a clear engagement plan. Due to the scale of the financial pressures and the requirement to protect essential services, it is evident that difficult decisions will be required. However, where applicable, there will be full consultation prior to the implementation of specific savings proposals.
Several budget risks were outlined in the report, including the continued impact of high interest rates, pressures in social care and SEND, and challenges in the Housing General Fund.
The revised MTFS position is now indicating a total funding gap of between £15.331 over the 3-year period and assumes that all service pressures included within the budget monitor are resolved in full. The Public Reports Pack outlines a broad timetable for reporting on progress, with key dates including MTFS Refresh discussions in September 2025, Fees & Charges Report in November/December 2025, and the 2026/27 Budget Report in February 2026. The provisional local government settlement for 2026/27, 2027/28 & 2028/29 is expected in late November.
Councillor Miriam Mirwitch and the committee members reviewed the information presented and discussed potential recommendations to address the financial challenges facing Waltham Forest.
