Waltham Forest Council is set to be £31.4m in the red by March 2026, having already overspent by £24m last year, reports Sebastian Mann, Local Democracy Reporter

Waltham Forest Council is predicting a £31million overspend by the end of the financial year, as costs continue to mount.

The council will be £31.4m in the red by March 2026, based on figures from the end of June.

The town hall overspent last year by £24m, which was £3m higher than initial projections – and already an increase from the £18m overspend the year prior.

Council leader Grace Williams said the overspend was largely a result of rising costs and increased demand in temporary accommodation and caring for older and disabled residents.

She said: “Local authorities across the country are under severe financial pressure and Waltham Forest is no exception.”

Due to a city-wide housing shortage, London councils have been forced to pay high costs to keep at-risk residents in hotels and bed-and-breakfast-style accommodation. Last year, it cost Waltham Forest £15.1m.

So far, the council is looking at spending a total of £168m on adult and children’s social care – a combined £15m above its budget.

£8.5m was allocated for temporary accommodation in the 2025/26 budget, but projections now show it will cost closer to £22m.

That marks a £14.3m overspend, bringing the combined total of the three pressures to £29m.

Cllr Williams has warned of “difficult decisions” since last summer, which she says need to be taken to avoid financial peril. In July, Councillor Paul Douglas, the cabinet member for finance, said the town hall “must continue to dig deep and reduce costs”.

Over the next year, top councillors will look to make around £15m in cuts, having already slashed council tax support for residents and free parking.

Cllr Williams told the Local Democracy Reporting Service: “Waltham Forest Council is committed to safeguarding the essential services on which local families rely as well as protecting the borough’s finances. Residents rightly expect us to spend their money wisely and to make responsible decisions where necessary.

“We continue to focus on our programme to change the way the council works, redesigning the way we work around our residents’ highest priorities and needs. None of these changes are easy.

“We have made significant savings while protecting what matters most to local people, including delivering a saving of £10m last year and a planned £15m in savings this year.”

Councils across east London, including Redbridge and Havering, have called for the government to update its funding formula, which is used to allocate annual funding levels for local authorities. It is still based on data from 2010, and critics say it does not take into account major demographic changes that have happened in the past 15 years.

Cllr Williams added: ““Residents continue to join us in pushing for a better deal for Waltham Forest in the Government’s Fair Funding Review.

“For example, to deliver public health services for residents, the government provides local councils with a grant. Here, that equates to £62 per resident. But in Newham that figure stands at £93 per resident, and in Hackney it rises to £127 – over twice what Waltham Forest receives.”

The report will go before the cabinet next week.

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