Hackney Town Hall. Pic: Wikimedia Commons.

Hackney councillors have been given a strong warning that they face “difficult decisions” in dealing with the estimated £74m overall budget deficit and overspend in certain areas over the next three years.  

Dawn Carter-McDonald, interim chief executive, told the scrutiny committee in Tuesday’s panel meeting that council services could be reduced because of the deficit.  

The council told Eastlondonlines that in addition to the estimated £57 million budget deficit, there is a forecasted overspend for the current financial year. The overspend was originally estimated at around £16.9m but is set to be reduced to around £11.4m after the application of savings and corporate provisions. Some of the areas affected by the forecasted overspend include adult social care, environmental operations, and education. 

According to McDonald, some of the deficit had been closed in the process of updating their medium-term financial plan for 2025/26 running through to 2028, but she noted that there was still the risk of council services being reduced, due to funding not keeping up with the increased demand for services.  

The council told Eastlondonlines that they recently wrote to Michael Gove MP, Secretary of State for Levelling Up, Housing and Communities, ”outlining concerns about council funding, particularly around homelessness, social care and special educational needs.” 

The council said on their website that they were moving to double council tax for owners of empty properties and second homes from April 2025, considering the current financial difficulties. They said that the money from the tax would be redirected to “vital local services”. 

McDonald said: “Given this significant increase in demand we are facing, alongside little prospect of increase in funding over the same period, we will be estimating a significant gap, which means we cannot rule out as a council reducing the range of services or reducing the standards we currently provide.” 

McDonald maintained that there is more work to be done, to continue running needed council services: “…it does take a broader thinking from ourselves…it goes to all of the services both statutory and non-statutory that we are required to provide, so there has to be that innovative thinking from ourselves as officers to be able to engage colleagues and also the partnership to come to the table…there is no point working in silos because if we work in silos it means that we don’t get the best outcomes for our residents…which very much is making sure that we continue to provide the services that we are required to provide on a statutory basis.” 

The council also told ELL that they are looking to present the council’s updated budget for 2024-25 later this month, which will cover how they plan to invest in delivering public services over the year ahead, and their “number of measures to reduce the budget gap”, while achieving expenditure reductions and maximising income opportunities.