Brent Council faces significant financial challenges, with an audit report raising concerns about its long-term sustainability due to rising expenditure and dwindling reserves. The external auditor's report identified significant weaknesses in financial sustainability arrangements, warning that the council is at significant risk if these issues are not addressed.

The findings were presented in the Annual Report of the Audit and Standards Advisory Committee, which Councillor Shamim Chowdhury presented to the Council meeting on Monday, July 6, 2026. The report noted that while Brent is in a relatively stable financial position, increasing costs are a major concern.

Drivers of Rising Expenditure

Specific factors contributing to the rising expenditure include rising demand pressures, particularly in temporary accommodation and social care, which have made delivering balanced budgets increasingly challenging. The report also highlights increasing costs and demand for services as key drivers for budget growth. Furthermore, the Housing Revenue Account is being impacted by pressures from repairs, compliance and regeneration programmes.

Impact on Reserves and Budget

The council has already dipped into its reserves to balance its budget. In the 2023-24 financial year, £13.5 million was drawn from reserves. For 2024-25, a projected overspend of approximately £14 million was initially highlighted. To cover service overspends of £15.5 million in 2024-25, earmarked reserves were used after an exercise to re-purpose them to support the revenue budget and enhance financial resilience.

At the end of March 2025, Brent Council's usable reserves (non-ring fenced) stood at £27.1 million. While the council had planned to increase these reserves by £5.4 million to £30.6 million by March 2026, no further increases were built into future years in the current Medium Term Financial Strategy (MTFS). The report emphasizes the urgent need to prioritise restoring General Fund and Housing Revenue Account (HRA) reserves to sustainable levels.

Consequences of Inaction

The Audit and Standards Advisory Committee report warns that the lack of adequate saving plans and failure to deliver recurrent planned savings places delivery of the Council's MTFS and overall financial sustainability at significant risk. The council must urgently take additional difficult decisions to ensure that a realistic budget could be set for next year and in the medium-term. This is crucial to avoid further drawing on reserves or seeking Exceptional Financial Support (EFS) from central government.

Addressing the Overspend

To tackle the financial challenges, Grant Thornton recommended that the Embrace Change Transformation programme must therefore reflect large-scale transformational savings, with greater collaboration and business transformation, underpinned by business plans and incorporated into a revised MTFS.

Other Areas of Review

The Audit and Standards Advisory Committee's work also included reviewing the council's risk management structure, emergency planning, and cyber security measures. While the council has a consistent record of its accounts being audited and signed off on time, concerns remain over risk management at the departmental level. Cyber security was highlighted as an area of particular concern during the year.

Regarding emergency planning, the committee reviewed an action plan for improvements and will be monitoring progress in this key area. Challenges also persist in asset valuation, with the audit of the 2024-25 accounts being delayed due to issues primarily concerning the valuation of council assets. The committee has noted the ongoing work to improve performance in this area.

Further details on the council's financial position and audit findings can be found in the Public reports pack.