Hammersmith and Fulham Council is facing a projected £14.3 million overspend on its revenue budget for the financial year 2026/27, according to a report presented to the Cabinet. The significant budget variance, which represents 6.4% of the council's net budget, has been attributed to increased demand and rising costs across key services, particularly in adult social care, temporary accommodation, and children's services.
Councillor Rowan Ree, Cabinet Member for Finance and Reform, presented the findings at the Cabinet meeting on Monday, September 14, 2026. He acknowledged that while a balanced budget was initially set, pressures have emerged across several departments.
While a balanced budget was set at the start of the year, there were pressures across adult social care, temporary accommodation, and children's services,
Councillor Ree stated in the report. The General Fund forecast showed a net overspend of £14.3m, attributed to increased demand and rising costs.
The report indicates a net forecast overall General Fund (GF) overspend of £14.3m. The People Directorate,
which encompasses Adult Social Care and Children's Services, has a variance of £13.168m. Within this, Adult Social Care and Public Health account for £11.203m, and Children's Services for £1.965m. The Housing Solutions
directorate, responsible for Temporary Accommodation, shows a variance of £2.702m, primarily driven by Bed and Breakfast accommodation, with a forecast variance of £4.339m.
The increased demand and rising costs in adult social care and children's services are driven by a combination of factors. These include the increasing complexity and acuity of need for those in care, an ageing population, a lack of suitable accommodation, and the impact of high interest rates and above-target inflation.
The report also highlighted an in-year pressure of £2.191 million within the Housing Revenue Account (HRA), primarily due to disrepair claims and decanting costs. However, this is expected to be managed through existing mitigations. These include the use of unallocated contingencies, spending controls, releasing reserves that may not be required (regarding the refund of water commission charges), capital programme management, and potential further capitalisation. These measures are anticipated to be sufficient to offset the HRA pressures, with the account forecast to be in balance at year-end.
Mitigation strategies and action plans are reportedly in place to address the £14.3 million overspend. These are set out within departmental commentaries, and work is ongoing to deliver them. Specific mitigations identified include potential service mitigations of £2.1 million. For the People Directorate, expenditure on Home Care, Direct Payments (Adults), Looked After Children, and care-experienced young people is expected to be mitigated and reduce in quarter 1, in line with the Medium Term Financial Strategy (MTFS) and strong social work practice and oversight. For Housing Solutions, potential mitigations include a review of all households in Bed and Breakfast accommodation to establish duty and reduce demand, a voids management plan for temporary accommodation, more efficient procurement and management of nightly-paid temporary accommodation, and improved systems and data processes.
The Cabinet noted and approved budget movements as outlined in Appendix 4 of the report, which can be found in the Public reports pack for the meeting. Further details on the meeting's agenda can be found in the Agenda frontsheet, and decisions made are available in the Decisions document. The Minutes of Previous Meeting are also available.