Barking and Dagenham Council faces having to find almost £28 million of spending cuts and savings to balance its budget next year.
The council says rocketing demand and costs in social services mean its predicted spending has increased, despite a government funding boost.
Senior Labour councillor Rocky Gill, responsible for finance, said balancing next year’s budget “remains achievable but will require difficult decisions”.
Town hall forecasts predict that the council will have to spend £331 million on day-to-day costs over the next financial year, running April 2027 to March 2028.
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However, it expects its total funding will be £303m – a gap of £28 million. This is up from a gap of £6.2m it predicted in February.
Papers presented to council leaders on Tuesday September 15 said “sustained and intensifying demand” on essential services was behind the predicted increase.
They said this was “particularly within adult social care, children’s social care, temporary accommodation, and services for children with special educational needs and disabilities”.
The papers also pointed to “wider economic factors such as inflation, interest rates, and national fiscal policy” linked to events such as the US’s war on Iran.
Speaking to fellow Labour council leaders at a cabinet committee meeting yesterday, Cllr Gill warned that “traditional” ways of finding savings wouldn’t be enough to reduce the gap.
He said the council would have to change the way it works in order to become more efficient.
Cllr Gill said that a recent government shakeup of local authority grants earlier this year had increased the council’s funding by an estimated 11.5%.
But, he added: “However, this still falls well short of historic funding reductions and the rising demand pressures.”
Councils across the country are struggling to make their funds cover rising costs and demand for services they must provide by law, such as social care, special educational needs, and temporary homelessness accommodation.
Labour councillor Maureen Worby, responsible for adult social care, said the problem needed a national fix.
She said she was “confident” that a planned national reform would mean “new models of care” between councils and health services.
Cllr Worby said: “We will all have to think differently about how we deliver social care in a way that is not just affordable for us but is affordable for the community as a whole.”
Labour council leader Dominic Twomey said that the cost of placing children in private care homes had risen by 25% across London.
Cllr Twomey said the council faced an “unrelenting” challenge to its budget, and that closing the £28m gap would be “a matter of a fair wind”.
However, he added: “We will chip away at that overspend and come the year end we will have a significantly smaller figure.”
