Waltham Forest Council leader Grace Williams has said the town hall could be forced to request a bailout by the end of 2027 as reserves fell by £17m last year, reports Sebastian Mann, Local Democracy Reporter
The town hall may be forced to request exceptional financial support (EFS) from the government within the next 18 months, council leader Grace Williams has admitted.
Her warning comes after it was revealed the council entered the current financial year with £40million in reserves, £17m down from its position last April. It spent a total of £19.1m in those twelve months, while adding just £1.8m.
Central reserves act as a financial safety net for emergencies and unexpected costs. They are often used to plug budget gaps, such as those faced by Waltham Forest.
The council overspent last year by £24m in 2024/25. The bulk of the overspend went on social care, which cost the council £15.1m more than it could afford.
The latest figures on the council’s reserves show that £13m was spent on ‘budget strategy,’ bringing the total down from £25.6m to £12.5m – dropping by just over half.
Council leader Grace Williams told the Local Democracy Reporting Service (LDRS) this week that the financial situation was “unsustainable”.
She said: “Our core spending power has decreased by over 10% since 2010/11, when adjusted for inflation.
“At the same time, the demand for the services we provide has spiralled. There has been an 80% increase in demand for temporary accommodation over the last two years alone, and we are caring for more adults with social care needs than ever before.”
The government’s funding formula is based on data from 2010, which many councils say does not take into account 15 years of demographic changes. In many cases across London, this has led to insufficient funding for social care and children’s services.
Havering Council, in east London, has faced similar pressures on its housing and social care sectors. It entered the current financial year with a budget gap of £74m, which was only plugged by a £88m bailout it will spend the next two decades repaying.
Waltham Forest could end up taking similar measures by the end of 2027, Cllr Williams has warned.
She told the LDRS that top councillors “may need to consider asking for EFS from the government within the next 18 months if the situation carries on like this.”
She added: “The fact that a well-run council like Waltham Forest is even considering an extreme move like this shows how serious the problem facing the local government sector is. This is a direct result of 15 years of inadequate funding.”
The Labour group leader says the authority is “working hard” to make the “best use of its limited resources” by reducing agency spend and reviewing the technology we use.
“We are approaching problems using innovation,” she added. “For example, our housing sustainment team works to prevent private rental tenants being at risk of homelessness where they may need temporary accommodation.”
The report is due before a budget scrutiny, made up of elected councillors, next week.
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