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Barking and Dagenham Council will have to find more than £12 million in savings or income to balance its budget next year, it has warned.
The council says rising demand and costs for services such as social care are making it harder to fund all of its expected spending.
Council leader Dominic Twomey said the gap “will not be easy to finance”. He said the council was “striving to deliver” legally required services “against the backdrop of ever-growing demand and need that has to be met, ranging from [special educational needs], [to] temporary accommodation pressures and fly-tipping.”
Details of the gap were presented in a report to council leaders at a cabinet meeting on Tuesday.
The report said that based on current spending and funding forecasts, the council faces a £12.6 million shortfall next year. It added that, without changes, this would rise to £16.8 million for the 2028-2029 financial year.
It said increasing demand and costs “are making it increasingly difficult to plan and deliver services and projects within budget”.
The report said: “Inflation is still pushing up the cost of delivering services, and rising wages are adding pressure to already stretched budgets, especially across social care and education.
“At the same time, demand for services continues to grow, driven by population needs, the ongoing cost-of-living crisis and housing pressures. ”
It added: “In this context, local authorities are having to make tough choices.
“Balancing short-term pressures with long-term priorities means focusing on what matters most to communities, finding new ways to deliver services more efficiently, and building financial resilience in the face of continued uncertainty.”
The report said that inflation, currently at 3.8%, is being “felt most accutely” in services such as adult and children’s care packages and private sector rents.
It also said a proposed 3.2% pay increase for council staff, negotiated nationally, was higher than the council had expected.
Labour councillor Maureen Worby, responsible for housing, told cabinet members she also expected the council to have to spend more on temporary accommodation.
Councils have a duty to house vulnerable people facing homelessness. But a rise in homelessness means many have had to spend more on renting accommodation for homeless families.
However, Cllr Twomey suggested the council may benefit from proposed changes to how the government funds local authorities. He said: “Extra funding for us looks likely based upon our significant deprivation, population growth, need and, as I keep saying, demand.”
The cabinet was also told that the council expects to finish this year with an almost-balanced budget.
But Cllr Twomey said the council would have to “work with robust financial discipline to ensure every pound spend is done so efficiently and affectively with minimum if any waste”.
He added: “This isn’t easy against the background of continued local government pressure.”
Cabinet members voted unanimously to approve the strategy for setting next year’s budget.
