Hounslow Council is forecasting a £2.8 million overspend for the current financial year, primarily driven by significant pressures within Children and Adult Services. The forecast, presented at the Cabinet meeting on Tuesday, 8 September 2026, indicates substantial budget challenges within these departments, contributing to the overall projected deficit against the General Fund revenue budget.
Councillor Max Mosley, Cabinet Member for Finance and Resources, presented the Quarter 1 financial monitoring update for 2026/27. While the Housing Revenue Account (HRA) is expected to remain on budget, with a forecast contribution to reserves of £1.7 million, and the Dedicated Schools Grant (DSG) position is also in line with the approved budget, the accumulated DSG deficit is projected to increase to approximately £16.0 million by the end of March 2027. This deficit is expected to grow from £11.8 million at the start of the year, before accounting for any High Needs Stability Grant.
Significant pressures have been identified within Children and Adult Services, totalling £3.3 million. This includes £1.1 million related to the delayed completion of the Bedfont Children's Home. The delay is attributed to the administration of the construction firm originally contracted for its build. The residential home is now expected to be operational by the next financial year, with a projected opening in February 2028.
Further contributing to the overspend are increased costs in Unaccompanied Asylum Seeking Children (UASC) provision and staffing at in-house residential units, amounting to £1.7 million. The primary drivers for these increased costs are the difference between service costs and grant income, and the staffing model at The Ride children's residential home. Specifically, 89 of the 119 young people in semi-independent UASC provision are aged over 18 and attract a lower weekly grant rate. Additionally, agency staffing is contributing significantly to the current pressure of £0.6 million across in-house residential units.
An additional £0.5 million is allocated for placements due to a rise in Remand to Care cases and an increase in average weekly costs.
Other directorates also face challenges. Strategy and Transformation is forecasting a £1.5 million overspend, primarily due to £0.7 million in Digital and IT savings being deferred to 2027/28 and £0.6 million in Culture and Engagement from the commercialisation of assets.
Wellbeing, Environment and Commissioning faces a £0.9 million overspend. This is attributed to pressures in several areas: Regulatory Services (£0.7m) due to agency cover for vacant posts and income shortfalls; Parks services (£0.6m) due to non-inflationary pressures on the maintenance contract and staffing budgets; Waste and Recycling Services (£0.2m) due to reduced income forecasts for Spacewaye and garden waste subscriptions; Leisure Services (£0.2m) due to savings not being deliverable in 2026/27; and Fleet Management (£0.2m) due to lower take-up of fleet services reducing recoverable costs. These pressures are partially offset by underspends in Parking services and Highways.
Savings delivery for 2026/27 is currently on track, with two-thirds of the £31.1 million programme either delivered or on course. However, £3.42 million of savings are now forecast to be delivered in the following financial year (2027/28). This slippage remains within the established £5 million contingency for savings delivery risk, indicating the overall savings programme is still considered on track for 2026/27, with the deferred savings expected to be realised in the subsequent year.
In response to these financial pressures, the Cabinet noted the forecast General Fund overspend and the progress on savings delivery. They also approved revisions to interment fees and charges for purchased graves, aiming to preserve burial capacity. Further details on the council's financial position can be found in the Public reports pack for the Cabinet meeting on 8 September 2026 Public reports pack Tuesday 08-Sep-2026 19.00 Cabinet.pdf.
