Redbridge Council is facing a projected £5.4 million budget overspend for the current financial year, with significant pressures across several directorates, according to a report presented to the Overview and Scrutiny Committee on Monday.
The Budgetary Control Report
for Month 2 of the 2026-2027 financial year revealed that the Place, Communities & Enterprise directorate alone is forecasting a £7.7 million overspend. This is mainly driven by a forecast under-delivery of savings of £3.490 million and pressures within Regeneration and Culture, including the Local Plan review, Leisure Client, and Estates. Specific pressures in Regeneration & Culture include void properties in the commercial portfolio, revenue impacts on capital schemes, costs associated with the local plan review, payments for lease surrenders, and payments to the Leisure provider due to loss of income. Mitigating actions totalling £3.456 million are incorporated within this forecast.
Adult Social Care is also projecting a £2.4 million overspend, primarily due to the under-recovery of client contributions for home care and nursing services. The report highlighted that while £16.7 million in mitigating actions are included in the forecast, a substantial portion of these savings are currently rated as 'amber', indicating a risk to their full delivery. The council's overall savings programme for 2026/27, totalling £15.8 million, has only seen 16% delivered by Month 2.
Among the 'amber' rated savings initiatives within the £16.7 million mitigating actions are £3.000 million related to 'Homelessness Initiatives' in Place, Communities & Enterprise, due to delays in implementing service structure redesign and transitioning landlords to longer-term leases. There is a risk that these savings may be phased over the next two years. In Resources, £4.046 million in mitigating actions related to 'Commissioning and Commercial savings' and 'consolidation of customer facing teams' are also amber-rated due to uncertainty surrounding the delivery of cross-cutting savings. Additionally, £0.300 million for 'SEN Transport Reduction in Costs' in Children & Education is amber, despite the service expected to deliver within budget. A further £5.972 million of cross-council savings are amber, with work underway to address performance issues with a new software supplier.
Councillor Vanisha Solanki, Deputy Leader and Cabinet Member for Finance and Shared Prosperity, acknowledged the overspend, stressing the need for further savings and efficiencies
to balance the budget for future years and reduce reliance on Exceptional Financial Support (EFS). The council has applied for and received approval for EFS for the 2026/27 financial year, and it is anticipated that bids will be needed for 2027/28 and 2028/29. EFS allows for the capitalization of revenue costs to capital, financed by external borrowing. The EFS for 2026/27 includes £20 million to rebuild the General Fund Balance, £20 million to address the budget gap, and £20 million to fund the modernization programme and review of capital schemes.
Councillor Solanki stated that the council's ambition is to return to financial stability without the need for EFS for the 2029/30 financial year,
but warned that there would be no resources available for new activities for the foreseeable future.
The Redbridge Recovery Plan aims to achieve this stability over the three years from 2026/27 to 2028/29, overseen by the Redbridge Recovery Board. This plan includes a modernisation programme focused on service redesign, eliminating duplication, and demand management, alongside continued delivery of savings through service redesign, digital transformation, and operational efficiencies. Asset disposals and alignment with the new corporate plan are also key strategies.
The report also detailed the council's capital programme, which forecasts a revised budget of £207.4 million. A £7.6 million slippage is expected for the General Fund, primarily due to delays in project delivery. Affected projects include Children's Community Equipment (£0.065m), Cleveland Infant School (£0.793m), Creation of Additional School Places (£1.063m), Highways works for Additional School Places (£0.470m), Valentines Park Lido (£0.259m), Ilford Arrival (£2.700m), HDP-Seven Kings High Street (£1.250m), Capital Maintenance Programme (£0.152m), and Regeneration and Property (£2.008m).
Collection rates for Council Tax and Business Rates are also below target at the end of May 2026. The target for Council Tax collection is 20.74%, with 19.70% collected, a shortfall of 1.04%. For Business Rates, the target is 20.48%, with 19.48% collected, a shortfall of 1.00%.
