Lambeth Council is grappling with a significant financial challenge, projecting an overspend of nearly £11 million for the current financial year. The council's Cabinet convened on Wednesday, July 22, 2026, to address the dire forecast, which stands at £10.979 million for 2026-27.

Pressures have been identified across several directorates. In Growth and Environment, an overspend is attributed to income shortfalls. Specifically, Bereavement Services and Parks events income are affected by the cancellation of two major summer events due to planning issues. Additionally, Sports Facilities face unachievable income targets due to the removal of maintenance budgets. Planning & Sustainability is experiencing shortfalls in capitalised salaries and DRW income, linked to reduced development activity. Regeneration, Growth & Capital Investment is also impacted by unachievable savings targets, particularly concerning Civic Centre lettings and Brixton House Theatre income. Libraries within Community Services are also projecting income shortfalls against their targets.

Housing Services face a projected overspend of £4.566 million, primarily due to delays in implementing new savings proposals. Savings related to Temporary Accommodation (TA) are not being realised as anticipated. The target for long-leasing properties, which aims to convert nightly paid accommodations into leases of over 10 years, is not forecast to be met, resulting in an estimated £1 million less income than planned. While incentives are being used to encourage moves from TA to the Private Rented Sector (PRS), the operational capacity to manage these discharges is taking time to build. An additional £3 million in incentive payments was intended to achieve a £6 million reduction in nightly paid properties over a full year, but only a £4 million reduction is expected in the current financial year (2026/27). Additional staffing is in place to reduce TA numbers and costs, but the full financial benefit of these roles is expected in the 2027/28 financial year.

Children's services are also under pressure, particularly from 'No Recourse to Public Funds' (NRPF) cases, a demand-led area for which the council receives no specific funding. The projected overspend for NRPF is £0.9 million. Furthermore, residential placements for adults are contributing to financial strain.

To mitigate these challenges, the council is implementing management actions. These include a review of high-cost care placements in Adult Social Care and efforts to maximise income from client contributions. In Housing Services, additional measures are being taken to reduce temporary accommodation costs, such as long-leasing properties.

The council is also seeking approval to utilise flexible use of capital receipts, up to £2.5 million, to support budget proposals. Of this, £0.891 million is allocated to a 'finance improvement programme'. This programme aims to streamline processes and adopt new technology, including updated Oracle ERP functionality, to automate manual tasks. The finance function has not undergone a systematic review for over a decade and is heavily reliant on manual processes. The programme is crucial for delivering significant savings already factored into the Medium Term Financial Strategy (MTFS) for the finance function, both internally and across the council's financial activities. Specialized skills, not currently available in-house, are required for this review.

An additional £2.6 million is earmarked for a capital scheme to install electric vehicle charging points, with the objective of generating further income.

The report, detailed in the Public reports pack, highlights that 21 savings schemes are currently flagged as 'Red' for delivery risk, representing a total savings gap of £18.157 million. The Growth and Environment directorate faces the most significant challenges in savings delivery.

Specific savings schemes flagged as 'Red' include:

  • Parking Income: Shortfalls are attributed to paused schemes, increased compliance, and a reduction in PaybyPhone transactions. A planned restructure to deliver savings was also put on hold.
  • Events Income: Delivery remains challenging against targets, with two major events cancelled due to planning considerations, leading to additional costs and reduced net income.
  • Regulatory Services: Savings are at risk due to an incomplete operational review and the necessity for staffing reductions.
  • Libraries Income: A review is underway to address forecasted shortfalls through income generation and cost-saving measures.
  • Fees and Charges: These will be reviewed via revised charges, improved cost recovery, and increased income generation.
  • Development of new burial chambers: The associated capital project is on hold with no identified funding, and the original savings target was overstated and is not achievable within the current MTFS.
  • Income from CCTV: Progress on small cell installations is subject to legal review, and work on Gaumont Place is on hold.
  • Markets: The savings target is under review due to the lack of an identified delivery mechanism within the current financial year, requiring alternative mitigation strategies.

Within the Resources directorate, the largest pressure stems from previously undelivered savings within Data, Digital and Technology.