West London council faces £45m budget black hole despite £175m government bailout

A west London council is facing a £45 million budget black hole despite securing almost £175 million in emergency government support to avert financial collapse. Chiefs at Hillingdon Council have warned the west London authority still faces years of difficult decisions as it attempts to balance its books and escape reliance on exceptional financial support from Whitehall. Council papers show the Conservative-run borough must find £45 million in additional savings by 2028/29, on top of £48 million of cuts and efficiencies already planned for the 2027/28 financial year.

The figures have highlighted the scale of the challenge facing the authority, which auditors said would likely have run out of reserves last year without government intervention. Officials received Exceptional Financial Support, a form of emergency assistance granted to struggling councils, worth almost £175 million. The package helped stave off the prospect of a Section 114 notice, the local government equivalent of declaring bankruptcy, and allowed around £40 million to be redirected into rebuilding depleted reserves.

However, internal reports suggest the authority's finances remain under severe pressure. Speaking at a meeting of the council's Audit, Finance and Performance Committee, external auditors warned members that the authority would have been "out of reserves" by the end of the previous financial year without support from central government. The council now faces a race against time to prove it can stand on its own financially before the support arrangements expire.

Complicating matters further is a looming deadline for the accounting treatment of councils' Dedicated Schools Grant deficits. Although the Government has agreed to absorb around 90 per cent of Hillingdon's historic schools-related debt, worth approximately £69 million, officers estimate the authority could still be left with a bill of between £7.7 million and £10 million when current arrangements end in 2028. The council plans to set aside an unused £10 million as a reserve to help cushion the impact.

Pete Carpenter, deputy Section 151 officer, told councillors: "If we don't deliver to those higher margins, we won't get out of [Exceptional Financial Support]." Meanwhile, chief executive Tony Zaman acknowledged the difficult path ahead. He told the committee the council was now "way past anything that's straightforward and easy" and entering "difficult" and "challenging territory". The authority has already identified a series of measures designed to reduce spending and increase income.

Among them are plans to raise parking charges by 70 per cent and scrap all dog waste bins across the borough. Other proposals include reducing expensive hotel placements for homeless households by acquiring more properties directly and placing families into longer-term private rented accommodation. Officials are also seeking savings from renegotiating care contracts, encouraging more post-16 pupils to take transport allowances rather than council-funded taxis, and moving some care leavers into shared accommodation.

Further income will be generated through rises in fees and charges including garden waste collection, cemetery services and planning applications. The full scale of the council's cost-cutting programme is expected to become clearer when its provisional budget proposals are published in the coming weeks.