Bexley Council is facing a projected budget overspend of £1.76 million for the 2025/26 financial year, according to a report presented to the Public Cabinet meeting on Monday, February 23, 2026. The overspend represents approximately 0.7% of the council's net revenue budget of £253.425 million. While this figure is a favourable movement of £0.176 million since the previous month's monitoring, it indicates a significant financial challenge for the local authority.
The report detailed that the overspend is primarily within Adult Social Care and Public Health, which is forecasting a £3.621 million deficit. This is largely attributed to increased placement activity and inflationary pressures on care packages. The number of placements is forecast to be 3,547, exceeding the planned 3,224. However, this deficit is partially mitigated by positive variances totalling £2.454 million, including £1.656 million from client contributions and Integrated Care Board (ICB) joint funding, and an additional £0.299 million from Health grants. Premises and staffing also show underspends of £0.049 million and £0.450 million respectively, due to vacant posts. Furthermore, the service has identified £3.260 million in mitigations through the implementation of its Financial Intervention Strategy.
Other directorates also reported pressures. Children and Education is forecasting an overspend of £2.234 million. Of this, Education accounts for £1.641 million, largely due to SEN Transport costs (£1.332 million variance) driven by personal transport budgets and faster-than-projected growth in children receiving travel assistance. Children's Social Care is forecasting an overspend of £0.645 million, with main pressures relating to specialist placements for children in care, where costs have increased by £0.368 million.
Conversely, the Place Directorate is forecasting an underspend of £1.595 million. This is largely driven by savings in Housing and Strategic Planning services, which are forecasting an underspend of £1.253 million. Approximately £0.967 million of this is due to a recruitment freeze while a restructure is considered. The remaining underspend relates to prevention budgets, predicting a prudent spend which is considered a more cost-effective use of funding than temporary accommodation. However, the sustainability of these savings is subject to risk from potential legislative changes, such as the renters' rights bill, which may offset further underspends on prevention.
Environmental Services also reported a significant underspend of £1.482 million, mainly due to a decrease in expected contract spend relating to refuse disposal.
The council's Medium Term Financial Strategy (MTFS) for 2026/27 to 2029/30 outlines a projected budget gap of £17.815 million by 2029/30. This strategy aims to address financial challenges through savings identification, transformation projects, and detailed service reviews. The council has developed a multi-faceted approach, including the Future Bexley
programme, which is in the delivery phase and focuses on transformational redesign, efficiencies, and income maximisation. Service reviews have been conducted for all services not involved in the transformation programme, assessing demographic change, rising inflation, interest and pay costs, and identifying mitigations and savings opportunities. Technical reviews have also been conducted on corporate finance, including the collection fund, pension fund contributions, reserves, and provisions.
Key assumptions for closing this gap include a 4.99% increase in Council Tax and a 2.00% increase for the Adult Social Care precept annually from 2026/27 onwards. The proposed Council Tax requirement for 2026/27 is set at £1,855.85 for a Band D property. This equates to an increase of 2.99% for the Council's element, in addition to the 2.00% Adult Social Care precept, resulting in a total increase of 4.99%.
The report also highlighted key financial risks, including contract inflation, pay inflation, increasing demand in social care and SEN transport, potential budget reductions from Integrated Care Boards, and the impact of the cost of living on residents and businesses. Proposed policy and legislative changes, such as the Children's Wellbeing Bill and changes to the Business Rates Retention System, could also have significant financial impacts.
This information was presented in the Public Cabinet meeting on Monday, February 23, 2026, and can be found in the Budget Monitor December - Period 9 report 1 Budget Monitor December - Period 9 - Public Cabinet.pdf.
