Hounslow Council is looking ahead to 2050 and updating its waste management plans, according to discussions at the Overview and Scrutiny Committee meeting on 27 November 2025. The council faces significant financial challenges, including a projected budget gap of £54.2m for 2026/27, driven primarily by inflation and increasing service demand. The council is undertaking a robust approach to savings identification and a continuation of the work that was commenced during 2024/25 to develop a programme of savings. The Council has already identified more than £20m worth of additional savings options as part of this prior work and the first strand of the approach to setting a balanced budget over the medium-term will be to further develop these existing options and assess what work is needed to get them to a state of maturity where they can be built into the budget.
The committee reviewed the council's forward plan, which includes items such as Hounslow's Vision 2050 and the West London Waste Plan Refresh. The council's forward plan lists decisions to be taken by the cabinet, cabinet sub groups, the leader and cabinet members, and occasionally by officers using powers delegated to them by councillors.
One Hounslow Financial Strategy
The committee reviewed the updated One Hounslow Financial Strategy (OHFS), which provides the financial parameters for setting the council's 2026/27 budget. The report pack includes the One Hounslow Financial Strategy July 2025 as an appendix.
The One Hounslow Financial Strategy aims to bring together the council's business and financial planning. It sets a corporate goal to achieve financial sustainability in the course of delivering local services and looks ahead across three years, setting out how it will support the council's objectives under the One Hounslow strategy. The OHFS supports the Council's six priorities: A Greener Hounslow, A Healthier Hounslow, A Cleaner Hounslow, A Thriving Hounslow, A Safer Hounslow, and A Liveable Hounslow.
The report pack notes that the updated OHFS assumptions drive the council's projected budget gap of £54.2m in 2026/27. The key drivers for the adverse movement are predominantly inflation and service demand. The Bank of England is now projecting that UK inflation will increase to 3.5% in the final quarter of 2025. The OHFS had been modeled on the previous assumption that inflation would settle at the Bank's target of 2% for the medium-term. Every 1% increase in inflation equates to approximately £4m of additional cost pressure. An initial review of the service demand assumptions included in the 2025/26 budget set in February has been undertaken. The main adjustment has been for Temporary Accommodation (TA).
It also notes the risk to the council's reserves position, stating that usable reserves are now running at a level that is lower than the Year 1 budget gap for the first time. The Council will undertake a full review of all commitments against these reserves as part of the 2026/27 budget process which may require changes to existing allocations.
The report pack states that the UK's consumer price index (CPI) has continued to spike in the second half of 2025, remaining at 3.8% in September. It notes that every 1% of inflation adds £4m of cost pressure to the council's spending plans. It also notes that the Bank of England does not expect CPI to return to its 2% target until early 2027.
The report pack also notes that the budget has been delayed until 26 November 2025, and that this has significant implications for the council's budget planning, with a long-awaited 3-year settlement due to be issued to the sector in December. This will include the outcome of the Fair Funding Review that seeks to re-balance and re-distribute local government funding nationally (including business rates) according to a set of revised formulas.