Richmond upon Thames faces a projected £2.8 million overspend, with rising homelessness costs identified as a primary driver. The council is taking action to address the volatility and affordability of Private Rented Sector accommodation by acquiring residential properties with the assistance of government and GLA grants, and renting accommodation from the private sector. These strategies are intended to mitigate the cost of funding expensive nightly temporary accommodation rates. This was according to the Corporate Q1 Quarterly Monitoring Report presented at a recent Finance, Policy and Resources Committee meeting.
The report, presented on Thursday 25 September 2025, highlighted that continuing pressures in homelessness costs are contributing £2 million to the overspend. The council is currently projecting a General Fund overspend of £2.8m.
The pressures are due to the ongoing impact of the ending of the pandemic protections, the volatility and affordability of Private Rented Sector accommodation, the sustained impact of the cost of living pressures, presentations from individuals facing and escaping from domestic abuse, and increasing unsustainability of hidden homelessness arrangements and overcrowding.
To address the budget shortfall and a potential 90% reduction in government grant funding, the council is launching an ambitious Transformation Programme to deliver improved, digitally enhanced services at a lower cost. The programme will be structured to join up delivery across eight portfolios, and an initial diagnostic
phase will take place over 4 months, with work to commence in the Autumn, according to the Medium Term Financial Strategy (MTFS) report. The committee approved a one-off allocation of £1.5m from the Financial Resilience Reserve to establish a 'Transformation Programme Delivery Fund'. The Financial Resilience Reserve has a balance of £25.6m at the end of 2024/25, according to the MTFS.
The Medium Term Financial Strategy (MTFS) report notes key changes since the budget was set in February, including continuing demand pressures and cost of living challenges. The report also refers to the Government's Fair Funding Review, which proposes a fundamental reset of national grant funding allocations between councils. Initial estimates suggest the proposed changes could reduce the council's grant levels by 90%, or £45m annually, by 2028/29.
The council has submitted a detailed response to the government's consultation and will continue to lobby for a fair and sustainable settlement. The MTFS states that the council will continue to lobby for a fair and sustainable settlement.
