Newham Council is facing a projected budget overspend of £6.17 million for the current financial year, according to the Quarter One budget monitoring report presented to the Cabinet on Tuesday, September 15, 2026. The forecast overspend has increased by £0.24 million since the previous month's monitoring report.
The majority of this overspend is concentrated within the Adults & Health and Children & Young People's Services directorates.
Adults & Health is forecasting an overspend of £4.118 million. This is primarily attributed to ongoing demand and cost pressures in care packages and placements, particularly in nursing and residential care. The underlying reasons for these pressures include cost increases carried forward from the previous financial year, and uplifts to provider rates for Direct Payments and Homecare. While activity levels are broadly in line with budget assumptions, the directorate has carried forward residual pressures from the previous financial year. To address this, the Adults & Health directorate is implementing a comprehensive budget recovery plan that includes immediate cost control measures, strengthened financial oversight, and medium-term service transformation. Specific actions include strengthening management oversight of care package approvals, enhancing demand management and panel controls, increasing scrutiny of residential and nursing placements, completing targeted audits of commissioned providers, and reviewing high-cost care packages. They are also reviewing vacant posts and exploring potential savings opportunities such as grant maximisation and reviewing charging policies.
Children & Young People's Services is projecting an overspend of £5.116 million. This is largely due to significant pressures in Home-to-School Transport, driven by an increase in the number of pupils requiring transport. This rise is attributed to an increase in the number of pupils requiring transport, a growth in applications for Education Health Care Plans (EHCPs), and increased travel costs. Changes in the Department for Education's statutory guidance on Home-to-School Travel also mean more pupils are eligible. Increased demand and complexity within Disabled Children's Services are also contributing factors, with a 25% increase in the number of packages and an increase in the average package cost due to the complexity of needs. The directorate is implementing a range of measures to mitigate forecast overspends, including working with Adults Services to ensure placements for over 18s are commissioned by Adults Brokerage, reducing the number of children's placements, strengthening processes to scrutinise costs for children with disabilities, reducing reliance on external taxis and procuring new contracts for better value, promoting direct payments for transport arrangements, and holding vacant posts (excluding Social Workers, SEND Officers, and Health Visitors).
Resources directorate is also forecasting an overspend of £1.192 million, an increase of £1.153 million since the previous month. This is primarily due to a loss of Housing Benefit subsidy, which is the difference between Housing Benefit claimed and allocated for temporary and supported accommodation.
These overspends are partially offset by a forecast underspend of £4.456 million within Inclusive Economy & Housing. This underspend is largely due to reduced nightly accommodation rates for temporary accommodation, which has led to savings earlier than anticipated.
Directorates have been tasked with developing and implementing budget recovery plans to address these overspends. The report indicates that 22% of Medium Term Financial Strategy savings have been delivered, with a further 53% on track. However, 23% of savings are not yet in delivery and carry a risk of non-delivery. These unachieved savings, graded as 'amber' or 'red', total £15.958m and pose a risk to the budget setting process for 2027/28 and the Medium Term Financial Strategy. Any unachieved savings will require a substitute saving to be found and delivered in 2026/27.
The Housing Revenue Account and Dedicated Schools Grant are both forecast to remain within budget. The capital programme, however, is forecasting an overall underspend of £86.055 million.
This report was presented to the Cabinet on Tuesday, September 15, 2026, as part of the Quarter One budget monitoring. Further details can be found in the Public reports pack.
