Hillingdon Council is facing a significant budget overspend of £36.3 million for the current financial year, primarily driven by increased demand in children's services, adult social care, and housing.
The monthly budget monitoring report for January 2026, presented to the Cabinet on Thursday, 19 March, revealed that service pressures in these key areas, coupled with financing costs, have contributed to the substantial deficit. Specifically, children's services contribute £6.1 million, adults' social care £6.5 million, and resident services (mainly housing) £8.3 million, with a further £5.2 million from financing costs.
The General Fund reserve is forecast to be overdrawn by £34.8 million. This overdrawn reserve will be corrected from the agreed Exceptional Financial Support (EFS) funding, with the council anticipating using EFS to replenish general fund reserves by £40.0m in the final year-end closure.
Councillor Eddie Lavery, Cabinet Member for Finance & Transformation, reported that 48% of the council's savings programme is on track for delivery, though some slippage into the next financial year is anticipated. The report states that £4.2 million will slip into £26.7 million, and £14.9 million has been written out as part of the £26.7 million budget-setting process.
The Dedicated Schools Grant (DSG) shows an in-year deficit of £9.2 million, which is expected to be mitigated by a government grant. This mitigation comes from a High Needs Stability grant due to be paid in the autumn of 2026. Recent government announcements on the Local Government Funding Settlement indicate that the government will cover 90% of the DSG deficit, subject to conditions.
The Housing Revenue Account (HRA) continues to forecast a break-even position. Despite HRA operating costs being forecast to overspend by £1.6m due to staffing pressures, increased gas and electricity costs, removal costs, and council tax levies on empty properties, these pressures are offset by a reduction in revenue contributions to the capital programme, ensuring the HRA remains balanced. The council is also taking steps to address the rising cost of temporary accommodation by seeking to make acquisitions that can be used to mitigate the impact of high rental costs in the private sector.
The council's overall budget update can be found in the Draft Cabinet Report Budget Update M10 v2 08 - REPORT Draft Cabinet Report Budget Update M10 v2.pdf.
Further details on the Homelessness and Rough Sleeping Strategy can be found in the associated reports: Appendix 1 - Homeless and Rough Sleeping Strategy 2026 - 2030.pdf, Appendix 2 - Homelessness and Rough Sleeping Review 2025.pdf, Appendix 3 - Consultation Report.pdf, Appendix 4 - Equalities Impact Assessment.pdf, and 05 - REPORT Homelessness and Rough Sleeping Strategy Cabinet Report.pdf.
Information regarding the Housing HRA Forward Investment Programme for 2026-27 is available in 06 - REPORT Cabinet Report- Housing HRA Forward investment programme 26-27.pdf.
The Substance Misuse Contract report is available at 07 - REPORT Substance Misuse Contract - Cabinet_Cabinet Member Report Checklist - DRAFT v1 - 02.02.pdf.
More information on the agenda and minutes can be found at Agenda frontsheet 19th-Mar-2026 19.00 CABINET.pdf and Printed minutes 19th-Mar-2026 19.00 CABINET.pdf.
