Financial prospects in the Borough of Hounslow “better than expected”

Cllr Max Mosley

New Cabinet Member for Finance and Resources dealt a better hand than he anticipated

LB Hounslow has published the Budget Outturn for 2025-26, a backward look at how what they actually spent compared with what they expected to spend and found they have done better than they expected.

The General Fund position is a £1.6m overspend, which is an improvement of £5.2m compared with the £6.8m directorate overspend reported to Cabinet at Quarter 3.

“A £1.6m overspend may sound bad”, Cabinet Member for Finance and Resources, Cllr Max Mosley, told The Chiswick Calendar, “but compared with other councils it’s very small”.

In October last year London Councils, who represent all 32 London boroughs and the City of London Corporation, flagged a funding shortfall of over £1 billion across London in the four years from 2025-26 to 2028-29, warning that half of London boroughs could require emergency support to avoid bankruptcy by 2028.

The financial crisis is being driven by skyrocketing statutory demands in homelessness support and social care.

Almost a quarter of London boroughs required Exceptional Financial Support from the government for 2025-26 totalling over £400m: Barnet, Croydon, Enfield, Haringey, Havering, Lambeth and Newnham.

Hounslow House

Hounslow now reaping the benefit from house building programmes in recent years

One of the reasons Hounslow is not on that list is that the borough has done better than most in providing social housing, Max told me.

“Temporary accommodation costs are one big way in which we’re different from other councils. In most London boroughs temporary accomodation costs put them near bankruptcy”.

Although new building in London has ground to a halt because of the increase in building costs Hounslow is reaping the benefit of having done relatively well in that respect in the past, he said.

Currently there are 500 families who need council housing. The projection was 700.

“We’re doing better because we have built more social housing”.

Cllr Tom Bruce, Richard Poulter and Cllr Shantanu Rajawat celebrate 96 new council homes in Brentford ready for people to move into as part of the Brentford Project, October 2024

Last year’s cuts effective

They are also in a better position because the cuts they made last year have been effective, said Max.

In February 2025 Hounslow Council announced a reduction in the provision of street lighting, which drew an immediate outcry from the Conservative group on the Council, as well as cuts in parks maintenance and a restructuring of Special Educational Needs and Disabilities transport services amongst other things.

READ ALSO: LB Hounslow to raise Council Tax and social rents by maximum while making £8.7m in cuts

At the same time they announced they would be raising Council Tax by the maximum amount and increasing social housing rents by 2.7%.

The savings programme had an 84% hit rate of success, Max told me, which has put them in a better financial position than they budgeted for.

Council Leader Cllr Shantanu Rajawat

Councillors paid more

Max, who was newly appointed as Cabinet Member for Finance and Resources after the elections in May, was given the task of restructuring the remuneration system for councillors, so it was fair and transparent.

Councillors will be pleased to find they have an increase in their basic allowance of £1,500 while the Leader and Cabinet Members will receive quite substantial increases in their special responsibility allowances as well.

READ ALSO: Hounslow councillors get a pay rise

Housing revenue improved

Another bright spot is the performance of the housing budget, which is separate from general funding.

The Housing Revenue Account is the revenue brought in from council tenants’ rents. The reserve position has been lower than the required limit of 15% total revenue.

The Council budgeted for a contribution of £1.8m to the reserve but the contribution was £4.9m, “so we are ahead of schedule on getting back to where we should be”, said Max. The projection now is that the Housing Revenue Account will be back in balance by 2027-28.

Lampton Group

Lampton Group now in profit

The much-criticised Lampton Group, wholly owned by the Council, which provides housing services and waste and recycling management, is also doing better than expected.

The loss-making company was projected to make a loss of £9oo,000 whereas in fact it made a profit of £100,000.

The Group has a new managing director. Rob Manning, whose background is business rather than local government, and his task now it to win contracts from other local authorities so the Group works in the way as intended.

Schools budget crisis

The bad news is the schools budget, which is showing an overall deficit of £2.5m, which represents a £5.3m reduction from the surplus schools balance of £2.8m at 31 March 2025.

School rolls are falling nationally because the birth rate is dropping and as the Department for Education pays per head of students, this is becomng a serious problem.

READ ALSO: Teachers braced for briefing on impact of falling school rolls on Hounslow

Based on three-year budgets received from 49 schools, the school balance deficit is forecast to increase to £8.7m by 31 March 2027 and £18.7m by 31 March 2029.

The Council is due to brief teachers in the borough about this on Thursday and plans to launch a consultation on reconstruction of the borough’s school provision in the autumn.