The Waltham Forest Council cabinet met on 9 September 2025, and agreed to extend the Environmental Services Contract with FCC for eight years, approved the Social Value Report 2024-2025 and the Social Value Policy 2025-2027 for publication, and noted a potential £15.331 million funding gap in the Medium Term Financial Strategy 2026/27 - 2028/29. They also discussed budget monitoring and the forecast outturn position for revenue, capital, HRA¹ and DSG² as at month 3.

Environmental Services Contract Extension

The cabinet agreed to extend the existing Environmental Services Contract with FCC for a further eight years, from 30 September 2027 to 29 September 2035. They also delegated the final negotiations of the contract extension to the Strategic Director of Neighbourhoods and Environment and the Strategic Director of Resources, and agreed an increase in the annual budget of £1.6 million from 30 September 2027 to fund the contract extension.

Councillor Clyde Loakes, Deputy Leader (Climate and Air Quality) explained that the contract extension offered a good financial deal, and that the council maintained a good relationship with FCC, who had overseen a large change to waste collection, including a change to fortnightly rubbish collection and the introduction of food waste collection.

Councillor Grace Williams, Leader of the Council said that refuse collection was one of the most important services run by the council, and pointed out that FCC had led the service change very well, which was highlighted by the resident insight survey.

The report considered several alternative options:

• Do nothing: This option was not recommended as it would result in the council not fulfilling its statutory obligations.
• Extend the contract for a period of less than 8 years: This option was not recommended as negotiations concluded that extending the contract by 8 years is the most advantageous both operationally and financially.
• Full procurement, including competitive dialogue: This would include procurement costs of between £200,000 to £400,000 and the likelihood of an increase in the contract price of over 16%.
• Bring the services in-house: This would lead to an increase in costs over the £1.6 million proposed in option B due to pension costs and the lack of skills and infrastructure to be able deliver a directly provided service.

Medium Term Financial Strategy 2026/27 - 2028/29

The cabinet noted the potential funding gap of £15.331 million for the three-year period 2026/27 to 2028/29, with £12.504 million in 2026/27, assuming all service-related pressures are resolved. The final position will not be known until the provisional local government finance settlement and final settlement are released, which is expected in late November.

The MTFS refresh assumes a council tax increase of 4.99% for all three years, which is subject to council approval. If the council tax increase is at 1.99%, the gap for the three years would be £29.807 million.

The cabinet also noted the requirement to achieve savings from management actions, efficiencies and a transformation programme, to mitigate the in-year baseline pressure reported in the month 3 monitor of £31.412 million, and the continuing uncertainty resulting from the implementation of the Fair Funding Review³ and the proposed reset of Business Rates.

Councillor Paul Douglas, Portfolio Lead Member for Finance and Resources confirmed that the financial situation was being taken very seriously by the council and that he had met with Councillor Williams, other Portfolio Lead Members and senior officers to seek innovative solutions to the financial challenges that the council faced.

Councillor Williams highlighted the importance of looking at how the council worked with the new ministerial team and the importance to keep applying pressure in relation to making savings.

Social Value Report 2024/2025 and Social Value Policy 2025-2027

The cabinet approved the Social Value Report 2024-2025 and the Social Value Policy 2025-2027 for publication.

The Social Value Report 2024-2025 covers progress and activities delivered by the council supply chain between April 2024 and March 2025. Since its implementation from January 2021, the council has obtained demonstrable social value benefit from its contracts of c.£51m, of which £49m has so far been delivered for the benefit of our communities. Within the past year social value has delivered £9m of demonstrable benefit.

The Social Value Policy 2025-2027 builds upon the foundations of the previous policy introduced in 2021, and aligns with the council's corporate priorities by setting out clear guidelines and commitments to maximise the additional value generated through procurement activities.

Councillor Douglas gave thanks to all officers involved for their hard work on both reports.

Councillor Williams said that the Social Value Report outlined a position that the council would like to sustain over the long term, and that considering social value had made a significant difference within the community.

Councillor Kizzy Gardiner, Portfolio Lead Member for Children and Young People referred to the Lloyd's Park Children's Charity as detailed in Appendix 1 of the report and highlighted the journey the charity had been on the amazing work they were doing for the community.

Budget Monitoring - Month 3

The cabinet noted the forecast outturn position for Revenue, HRA and DSG as at month 3, and approved:

• £0.015 million funding from the budget strategy reserve (BSR) to fund the 2025 Pride Awards and £0.145 million towards the together campaign from the BSR.
• £0.500m additional capital funding for Soho Theatre due to extended timelines to complete works (September 2024 to March 2025).
• An amount not exceeding £0.300m, to be funded from capital contingency, for fit out works on Unit C Soho Theatre, to enable the unit to be let on a commercial basis (i.e. ducting and electrical upgrade).
• £0.984 million to fund the Oracle stabilisation programme, of which £0.894 million is to capital related to be funded from the capital contingency and £0.089 million is revenue expenditure to be funded from the corporate revenue contingency budget.

Councillor Douglas explained that the council's core spending power had reduced by 11% since 2010/11 on services that costed a substantially more, and that the council was still experiencing the impact of high inflation and high borrowing costs, noting that the long-term borrowing rates were at a 27 year high.

He highlighted that expenditure had been reduced in Neighbourhoods, Children's Services, Resources and Chief Executive service areas, and a 20% reduction in the number of children in care over the last 2 years had been achieved. The council had achieved cumulative savings of £140 million since 2010/11, including £10 million for the last financial year and the council was on track to deliver a further £15 million savings next financial year, and the use of agency staff had reduced by 30% over the last 2 years and work continued on the council's Transformation Programme to reduce expenditure.

Despite this, there were external factors which were beyond the council's control and there were unprecedented increases in demand-led services, including temporary accommodation, children services (including those with special educational needs and disabilities (SEND)) and adult services. In addition, homelessness demand had increased by 80% over the last 2 years, which is in line with other London boroughs and was the single biggest financial challenge faced by the council. The number of SEND packages had increased by 39% in the last 2 years which were again in line with other London boroughs and had an impact on other areas within children services, including placements, homes and school transport. The cost of adult social care packages had increased per package by 13% over the last 2 years and, as a result, managing services was becoming more difficult with suppliers regularly failing and going out of business which has required the council to step in and find alternative and often more expensive solutions in order to keep vulnerable residents safe.

Councillor Williams stated that it was important to be clear that the financial situation of the council was not improving and thanked Councillor Douglas for drawing attention to the efforts officers were making to address financial issues, which was underpinned by focus and resilience. She said that the council needed to consider future actions carefully.