Islington Council is facing a projected £2.2 million overspend by the end of the financial year, a net figure after corporate savings have offset departmental deficits.
The council's Executive committee reviewed the Q1 Financial Risk Monitor for 2026/27 on Thursday, September 17, 2026, highlighting significant financial challenges across several departments.
Children's Services is forecasting the largest overspend, at £2.975 million. This is primarily attributed to an increase in the number of children and young people requiring a high level of support in residential settings, coupled with rising costs from private providers. Councillor Sheila Chapman, Executive Member for Children, Young People & Families, explained that these for-profit providers have significantly hiked their prices. Management actions are underway to mitigate these pressures, including exploring the establishment of the council's own family home-style residential settings.
Further financial pressures were noted in Community Wealth Building, with a projected £0.7 million overspend due to delays in the delivery of planned FutureWork savings. The full delivery of these savings is expected by 2027/28 through an asset rationalisation programme and securing tenants for vacant office accommodation. However, the timing and delivery of these actions remain a financial risk in the current financial year.
The Homes and Neighbourhoods department faces an overspend of £0.279 million, largely driven by bad debt provisions and historic rent arrears within Temporary Accommodation. To address this, the council is implementing a streamlined rent collection process, a dedicated rent collection team, and providing support for households to claim their full benefit entitlement. A recent three-month pilot of these measures generated £250,000 in additional income and avoided £200,000 in potential rent arrears.
These departmental overspends are partially offset by corporate savings of £1.7 million. This saving is mainly due to a £1.4 million reduction in capital financing costs arising from the asset disposal programme. The report also indicates that demographic growth funding held corporately is not currently forecast to be required in full.
However, a projected overspend of £0.964 million for the national pay award presents an additional corporate financial risk. Any additional cost will be met by the council's general contingency budget provision, and the position will continue to be monitored and reflected in future forecasts.
The Q1 Financial Risk Monitor for 2026/27 was presented to the Executive committee, as detailed in the Public reports pack.
Further details on the meeting agenda can be found in the Agenda frontsheet, and the Decisions made were also published.