Mid-year update on Waltham Forest finances

• Costs for social care, special educational needs, and temporary accommodation continue to rise 
• £10m of in-year savings to be achieved by reducing agency spending and reviewing ways of working 
• Current indications are that savings of between £18m to £24m could be required over the next three years  
• Front-line services are protected so most vulnerable residents continue to receive the support they need  

Residents of Waltham Forest have been given a mid-year update on how the council is investing taxpayers’ money carefully and responsibly in the face of the serious financial challenges facing local authorities across the country.  

The Medium Term Financial Strategy (MTFS) was presented to the Cabinet at a meeting on Tuesday, November 5. The report sets out the anticipated funding gap and savings required for the council over the next three years. 

The MTFS report sets out a forecasted in-year overspend of approximately £17m, due to increased demand on key services and rising costs. Social care for adults and children, and the costs of providing for children with special educational needs, account for the large majority of this overspend.  

Cllr Grace Williams, Leader of the Council, said: “Residents rightly expect the council to spend their money wisely and make the right financial decisions for the borough. We are doing all that we can to safeguard the essential services on which you and your family rely, and at the same time protect our borough’s finances.

“As you will be aware, councils across the UK are facing huge financial challenges. The majority of our money goes into caring for older and disabled people, and supporting children in care or those with special educational needs or disabilities. We will do everything in our power to meet our most important responsibility, but this means we face some tough decisions.”

Across London, the number of people who are at risk of being homeless and seeking support from their council is also increasing, as are the costs of securing temporary accommodation which have more than doubled in the last year. In Waltham Forest, the current forecast is for an in-year overspend of £4.5m that is being met this year by one-off reserves. 

Cllr Williams continued: “We must be honest – London is facing an emergency when it comes to temporary accommodation. The costs of arranging a place to stay are rising fast, while the availability of suitable temporary and permanent accommodation is declining. Our spending on temporary accommodation has more than doubled in the last year alone. 

“We cannot overestimate how distressing losing your home is. Families facing homelessness deserve our compassion and respect. The grim reality is there are not enough homes available in London. The only way to tackle the housing crisis head-on is to build more high-quality genuinely affordable homes and give local people the chance to live in a place of their own near their family, friends, and support networks.”

The MTFS currently predicts a difference of £18m to £24m between what the council will spend over the next three years and its estimated income. This prediction assumes that Council Tax will need to rise by 4.99 percent for all three years. The final savings requirement will be determined by the financial settlement from the central government for each year. 

The council has identified approximately £10m of savings for the rest of the financial year, to be achieved through reducing spend on agency staff, reviewing what platforms and tools we purchase, and transforming how the council works between departments and with partners. Further savings proposals are being developed to address the remaining spending gap as the next council budget is prepared for spring 2025. 

Cllr Williams finished: “Last week, the new Chancellor, Rachel Reeves announced her first budget. It presented a realistic and honest response to some of the challenges the country faces. The budget signalled that the long-term challenges facing the local government are understood and are beginning to be addressed. However, the fact remains there will still be a significant shortfall in the amount of money ultimately needed to tackle the rising pressures we are facing, from temporary accommodation to social care.

“After 14 years of underfunding, councils across the country are facing significant financial challenges, and Waltham Forest is no exception. We are facing tough decisions that we will tackle with residents’ interests at the heart of our approach so we can continue to protect and support those who need our help the most and deliver on our ambitions for the borough.”

The government will release details of the local government finance settlement for 2025/26 in late December. The next annual budget for Waltham Forest will be reviewed at meetings of the Budget Scrutiny Committee and Cabinet before being taken to the Full Council on 27 February 2025. 

The council recognises that for many local people, rising costs continue to pose a significant challenge. There is a wide range of support available for those who are struggling. 

Visit the council website for more information and ways to apply.