Harrow Council is facing a projected overspend of £3.039 million in its revenue budget for the first quarter of the 2026-27 financial year. The significant shortfall is primarily attributed to pressures within Children's Services, with substantial overspends anticipated in residential placements for children in care and for those with disabilities.
The revenue and capital budget monitoring report for the first quarter of 2026-27, presented to the Cabinet on Thursday 24 September 2026, revealed that Children's Services alone is forecasting an overspend of £6.146 million. This is largely due to increased costs for residential placements for children looked after and care leavers, amounting to £4.1 million, and £1.8 million for children with disabilities. The report states that the increased demand and costs for these services are driven by a double whammy every year
of rising numbers of people needing assistance and the escalating cost of providing that help.
Further pressures are noted in SEN transport, with an overspend of £0.8 million attributed to higher taxi costs, increased demand, and price inflation. The Dedicated Schools Grant (DSG) also shows a projected overspend of £24 million in its high needs block. This overspend is due to the increasing number and complexity of need of children requiring Education Health and Care Plans (EHCPs)
and a growing number of children being placed in independent and non-maintained special schools, with placement costs continuing to rise.
This contributes to a cumulative deficit of £54 million by March 2027. 
Adult Services also faces financial challenges, with an overspend of £1.5 million on placement budgets despite an £11 million budget increase. Housing Services reported a £0.9 million overspend. While increased demand for temporary accommodation is the primary driver, this is compounded by additional bad debt provisions of £0.9 million, largely due to increased demand for nightly paid accommodation. This is partly mitigated by reduced running costs and additional income.
The council is hopeful that the £3.039 million anticipated overspend can be controlled, but acknowledges the significant financial pressures faced by local government. The report states that this sum will need to be drawn down from the budget planning reserve if it is not mitigated by year end, which we hope it will be.
Councillor David Ashton, Portfolio Holder for Finance and Highways, stated that while the council's financial settlement was better than previous years, it only brought them back to a level that should have been provided previously. He added, It's not a question of a sudden gift from government, it's what they should have given us ages ago.
The Cabinet noted the forecast outturn positions and approved proposed additions and amendments to the Capital Programme. These include an addition of £776k for Transport for London Local Implementation Plans (LIP) for the Harrow to Pinner Cycleway, and an addition of £1.359m for SEN Expansion (HNPCA) to support the creation of additional places for children and young people with special educational needs and disabilities. A reduction of £78k for Schools Capital Maintenance was also approved, reflecting the confirmed 2026/27 Schools Condition Allocation from the DfE.
The report also highlighted that the council's trading company update for 2026-27 Quarter 1 showed a balanced position for the Housing Revenue Account. The Cabinet's discussions and decisions are detailed in the Public reports pack Public reports pack Thursday 24 September 2026.
