Waltham Forest Council leader Grace Williams has called a decision to apply for a £19m government loan ‘financially responsible and morally correct’, reports Sebastian Mann, Local Democracy Reporter
Waltham Forest Council will need to borrow up to £19million to balance its books after years of financial strife.
The town hall says it will apply for ‘exceptional financial support’ through the government, while increasing council tax by 4.99% in April.
In early September, Waltham Forest councillors were told it was set to go over budget by £31.4m.
The announcement was made ahead of Waltham Forest’s 2026/27 budget being scrutinised by councillors next week. It will go before councillors for final approval at the end of the month.
The main focus will be on social care and housing, which accounts for 72% of the council’s current expenditure.
Council leader Grace Williams, who has long warned of “difficult” circumstances, said: “We will focus on services for our most vulnerable residents in particular, not only because – by law – we must help them whenever they are in greatest need, but also because it is morally right we do so.
“This is where almost three quarters of our money goes – a staggering 72 pence in every pound the council spends.”
She called the decision to apply for the loan “financially responsible and morally correct”.
“We have a very clear purpose for the use of these funds and a plan to quickly pay back the loan,” she said. “The extra money will protect services while balancing our budget in the short term.
“It will free up the time and resource necessary to accelerate a plan to fundamentally change to the way the council works.
“Benefits will be felt across all of the areas that matter most to local people – from bin collections and road repairs to maintaining local parks and supporting culture.”
Housing demand in the borough has increased by 80% over the past two years. It now costs Waltham Forest £24m a year, against a budget of £10m.
The cost of adult social care has risen by 13% since 2023/24, according to earlier figures, and providers going out of business meant the council was left with “expensive” alternatives.
The council says the loan will “fully secure” its financial position, and keep a minimum of £30m in reserves by 2029. This helps keep the council tax hike below 5%, the town hall says.
The council will receive £18m extra from the government next year to help address historic shortfalls in funding, with the town hall saying this would not cover its £33m total overspend.
In a bid to save more money in the future, she says the council will “act far earlier” and help families before they “reach crisis point,” which will “reduce the need for our highest cost services”.
Additionally, the council will “modernise processes” and implement more widespread data and technology. In January, the town hall began piloting AI tools such as the automatic note-taking service Magic Notes to cut social care delays.
Investments have also been made in “quality local [special educational needs] services, providing help for children closer to home and reducing costly transport bills”.
While these new investments may help children in need, families are still reeling from the closure of the Markhouse Centre – which catered for a range of adults with learning difficulties – last year.
Waltham Forest is not alone in its troubles.
The 32 London boroughs are grappling with a combined funding shortfall of more than £1billion.
Seven are already using exceptional financial support, while London Councils estimates that by 2029, half the city will be in receipt.
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