Tower Hamlets Council is facing a projected £18.6 million overspend on its General Fund for the financial year 2025/26. This significant deficit is primarily attributed to increased demand and cost pressures within key services, including homelessness, adult social care, children's social care, and special educational needs and disabilities (SEND) provision.
The overspend is driven by substantial net overspends in adult social care and children's social care. The report on the 2025/26 Draft Statement of Accounts
highlights that underlying pressures, particularly in our adult service, particularly in our children's services, particularly in temporary accommodation
are contributing factors. The Housing and Regeneration directorate is also facing a £20.8 million deficit. This is largely due to increased demand for temporary accommodation, with family evictions, domestic abuse, and terminated private tenancies being key drivers. The Renters' Reform Bill has also contributed to an increase in evictions from private sector rented tenancies, exacerbating these pressures. The Progress Update on Action Plan Delivery
report also mentions demand-led pressures that the Council is facing
as a reason for significant shifts in costs.
In response to these financial challenges, the Council has implemented a Medium-Term Financial Strategy (MTFS) for 2026/27 to 2028/29, which aims to address these pressures and ensure financial sustainability. The strategy incorporates assumptions about inflation and service demand growth, and includes contingencies to mitigate risks.
