Ealing Council Drawing on Contingencies to Balance Budget
Social care cost drives overspending as planned savings not achieved
Ealing residents unlikely to face massive council tax bill rises feared in other boroughs. Picture: AI generated
October 29, 2026
Ealing Council is on course to finish the year almost on budget, but a report going to Cabinet next week shows it is doing so by leaning on treasury gains and contingency funds rather than by cutting the cost of running services.
The Quarter 2 budget monitoring report, which goes to Cabinet on 4 November, forecasts a net General Fund overspend of £0.739m, or 0.17% of the £423.5m net revenue budget. That compares with a £7.797m overspend forecast three months earlier. Council services themselves, however, are forecast to overspend by £18.977m. That gap is largely closed by £18.238m of underspends in corporate budgets, including £6.660m from lower minimum revenue provision costs, a £5.000m annual revenue contingency and £5.850m of risk contingencies set aside for demand and savings pressures.
Of the £7.058m improvement since the first quarter, only £0.902m came from services. The remaining £6.156m came from corporate budgets. The report itself acknowledges that, given the level of contingencies assumed, it is "crucial" that action is taken to reduce non-essential spending. Reliance on contingencies is not the same as drawing down reserves as these were included in the earlier budget to meet any overspends.
Adult social care is the biggest pressure. Adults & Public Health is forecast to overspend by £14.171m, up from £12.459m at Q1, driven by £14.444m of costs for long-term learning disability, mental health and older adults placements, mainly because of new demand. Children's services are forecast to overspend by £1.665m, with passenger transport and placements for disabled children among the causes. Housing Demand is £2.495m over because of temporary accommodation costs and housing benefit subsidy losses, though extra parking income helps Housing & Environment as a whole report a £3.611m underspend. Last year, by comparison, the council was forecasting a £1.472m underspend at the same point.
Progress on savings is slow. Full Council approved £11.937m of savings for 2026/27, but by the end of September only £4.457m, or 37.34%, had been delivered. A further £2.671m is rated red, meaning it is at risk of not being achieved this year or has not been replaced. Children's Services carries half the total target at £6.0m and has delivered about 35% of it. A separate £5.527m efficiency target spanning workforce, digital, contracts and assets has yet to be allocated to specific service budgets and shows no forecast delivery.
Other council accounts are under strain. The Housing Revenue Account has swung from a small forecast underspend at Q1 to a £2.999m overspend, which will be met from reserves, cutting them from £17.308m to a forecast £14.309m. That reflects lower capital receipts, higher repairs and building safety costs and £0.670m spent responding to the Sheringham Tower incident.
The Dedicated Schools Grant, the ring-fenced budget for schools, shows a forecast in-year deficit of £18.078m, driven by demand for support for children with special educational needs. The government has accepted the council's SEND reform plan and agreed a £16.309m grant against the historic deficit, which cuts the projected March 2027 deficit from £34.619m to about £19.9m. The in-year shortfall nonetheless continues to grow.
The capital programme has also shifted markedly. General Fund capital spending planned for this year has fallen from £430.7m to £126.8m after £254.9m of slippage and £56.9m of decommissioned projects, with only £17.1m spent so far. Perceval House refurbishment is forecast to overspend by £0.853m and Gurnell Leisure Centre by £0.703m. Cabinet is being asked to approve the re-profiling of £11.354m of capital budgets and a £0.170m revenue budget, funded from s106 interest, for a feasibility study into improvements at North Acton Station.
Collection of local taxes is behind target. Council tax is £1.216m short of its profile and business rates about £4.1m short, although the report says these gaps will affect future years rather than this one.
Although there are cause for concerns in the report, the borough is unlikely to face the same situation as boroughs like Hammersmith & Fulham and Wandsworth which face having to make significant rises in Council Tax rates due to the government’s Fair Funding Reforms. The reduction in central government support to Ealing is much less than for these boroughs. Although not explicitly stated, the budget report does appear to suggest that Ealing will have to, one again make the maximum council tax rate increase of 4.99% for 2026/27 bills with 2% being for the Adult Social Care Precept.
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