Greenwich Council's financial sustainability has been questioned by its auditors, who have identified a significant weakness in the council's arrangements for managing its finances. The 2024/25 Annual Audit Report, prepared by external auditors Forvis Mazars, highlighted a continued reliance on reserves to bridge budget gaps and a failure to deliver planned savings.
The report, presented to the Audit and Risk Management Panel on Tuesday, March 17, 2026, stated: From examining the proposed savings, it is unclear how the Council will maintain an adequate level of reserves if they continue to draw down them and do not deliver sufficient savings and transformation of services.
Despite the unqualified audit opinion on the council's and the Royal Borough of Greenwich Pension Fund's statements of accounts, auditors noted that the scale of the financial planning challenge remains a significant weakness. The council approved a balanced budget for 2026/27 and increased reserves, but the report indicates that the rate of reserve usage is unsustainable.
In the 2024/25 financial year, the council's general fund reserves decreased by 16.3%. As of 31 March 2025, the General Fund Balance stood at £189.4 million, with £170.7 million committed and £18.7 million uncommitted. The Housing Revenue Account reserves also saw a significant reduction, with a balance of £8.1m as of 31 March 2025.
The auditors pointed to a £10.7 million overspend in departmental service growth, primarily in Children's and Health and Adults services. Specifically, there were notable overspends of £10.4 million in Children's and £4.7 million in Health and Adults. This overspend was offset by Business Rates additional income of £5.3 million and £12.8 million of one-off measures, which included the application of reserves and section 106 grants.
The report also noted that the council did not meet its 'Rethinking Services' savings targets of £11.2 million in 2023/24, delivering only £2.4 million. While a transformation and savings plan has been implemented, with 69% of the 2024/25 savings plan delivered, there remains a high level of slippage. The council forecasts a budget gap of £42.7 million for 2026/27, increasing to £68.9 million in 2027/28 and £96.3 million in 2028/29, indicating a growing future structural deficit.
To address this, the Council has invested in a corporate Transformation & Change team to support the delivery of projects and savings plans. The strategy involves developing savings plans within the context of the Medium Term Financial Strategy (MTFS), focusing on themes such as service efficiencies, efficiencies enabled by technological innovation, traditional operating efficiencies, and reviews of contracts and procurement opportunities. A public consultation process is also carried out alongside the development of the MTFS. The Council also notes the option to rely on one-off measures including s106 funds and capitalisation of salaries, and reducing the revenue contribution to capital, though these are not sustainable long-term strategies.
In terms of governance, auditors found that the council had appropriate arrangements in place. However, a concern was noted regarding compliance with the Regulator of Social Housing requirements. This was subsequently confirmed to have been addressed, and the regulatory notice has been lifted.
The 2024/25 Annual Audit Report is scheduled to be considered by Full Council on March 18, 2026. The report can be found in full here: 2024-25 Annual Audit Report.
