Brent Council's reserves have fallen to £20 million, a figure described as a concern
by councillors, particularly in light of a projected £9.5 million overspend for the current financial year. This level of reserves is below the target of £23 million, which many local authorities aim for as 5% of their general fund.
The Resources and Public Realm Scrutiny Committee meeting on Wednesday 29 July 2026 heard that the council's financial position is under pressure from rising demand for statutory services and high inflation. Councillor Graal, Deputy Leader and Cabinet Member for Finance and Resources, presented the report, highlighting the projected £9.5 million overspend for the current financial year.
The meeting information indicates that the council has faced significant overspends, particularly in temporary accommodation (£11.7 million in 2025-26) and the Dedicated Schools Grant (DSG), with an £18.2 million deficit forecast. Councillor Graal also highlighted the ongoing pressures of rising demand for statutory services, high inflation, and the housing crisis as key challenges. Specific inflationary pressures are also impacting the council's highway network maintenance.
While the council has strengthened financial controls and is rebuilding reserves, the current level of £20 million is considered low against the potential £9.5 million overspend forecast for the current financial year. If this overspend is sustained, it would leave only £10 million in reserves for future years. Councillor Graal stated that over the past year we have strengthened financial controls and improved budget management. We've also taken a more collaborative approach to delivering savings, improving productivity, and building greater financial resilience.
However, the report also notes that spending controls alone are unlikely to be sufficient to mitigate the scale of the challenge. Therefore, with the exception of expenditure required to maintain health and safety, meet statutory obligations or fulfil contractual commitments, all other spending decisions will be subject to enhanced challenge and may be deferred where possible. Directorates will also be required to identify additional in-year savings, cost avoidance measures and opportunities to reduce expenditure wherever possible.
This indicates that cost reduction measures are being considered, but specific service cuts or revenue-generating initiatives were not detailed.
As part of the budget setting process in February, the council committed to rebuilding reserves over the medium term to manage financial resilience and meet future pressures. However, a specific projected timeline for achieving a more comfortable reserve level was not provided. The council's financial position and the details of the scrutiny committee meeting can be found in the Public reports pack and the Agenda frontsheet.
