Central London council planning almost £20million in ‘savings’ over next financial year

A Central London council is planning almost £20m in “savings” over the next financial year, a report has shown. Westminster City Council said the measures are aimed at tackling a £15m budget “gap” expected for the 2025/26 financial year.

The gap is expected to equal £55m over a three year period but could shrink to £40m with the savings currently being proposed for next year’s council budget. A report by Westminster City Council shows an uplift in employers’ National Insurance contributions from 13.8per cent to 15pc will also impact the council’s overall costs.

During a meeting on Tuesday (November 12), it was confirmed staff directly hired by the council would have this uptick covered by the Government. Westminster City said it has identified £28.9m in “savings options” over the next three years with the bulk - £19.9m - expected to kick in from 2025/26.

READ MORE: Full list of the 33 London Post Office branches facing closure

READ MORE: New TK Maxx opens on Oxford Street with long queues of people wanting to be the first inside

It is not clear what these savings are and how they will impact services. The council is also proposing £10.1m in investment proposals and is expecting to experience £12.8m in “service pressures” next financial year.

The report read: “Most significantly this includes demand and complexity pressures within Adults Social Care, increases in care leavers and uncertainty over health funding in children’s Services, accommodation for increased rough sleepers and temporary accommodation staffing support.” None of the proposals take into account any decision on the level of council tax rises for future years.

The report states for every 1pc increase, the net yield for Westminster City would be £690k. The council won’t find out how much it will receive in government funding for next year until December and said funding levels beyond this is uncertain.

Among the pressures the council faces is a steep rise in temporary accommodation placement and adult social care. During a meeting on Tuesday, cllr Liza Begum, cabinet member for Housing Services, said for every one percent increase in homelessness not already budgeted for would cost the council £450k.

Council officers said Westminster City had one of the largest proportions of rough sleepers and temporary accommodation seekers in the capital. The same report showed roughly 18pc - or 753 - of rough sleepers are located in the borough, an increase from last year’s figures of 16pc.

The Housing department is estimating £6.3m in "efficiency savings” for 2025/26 to cope with increased pressures. A report by the council found a lack of affordable housing, an increasing reliance on the private rental market, benefit caps and the rising cost of living has put a significant proportion of Westminster City residents at risk of deprivation or homelessness.

The same report shows the net cost for temporary accommodation has risen 745pc since 2021/22. In 2021, the council’s net expenditure on temporary accommodation was £4.46m. That has now risen to £37m.

The housing department is planning to increase rental income, introduce a £750k reduction in overheads and reduce the number of nightly-booked accommodation. A final budget is expected before the Full Council in March.

Want more from MyLondon? Sign up to our daily newsletters for all the latest and greatest from across London here.