Lambeth Council is grappling with significant budget pressures, with children's services facing a projected overspend of £2.018 million for the current financial year. This is part of a wider financial challenge for the council, which is forecasting a total overspend of nearly £11 million for 2026-27, and a cumulative budget gap of over £93 million across the next three years.
The pressures within children's services are attributed to several factors, including increased costs for No Recourse to Public Funds (NRPF) cases and residential placements for adults. The report highlights that caseload pressures within specific teams necessitate financial challenges to ensure safety and manageability.
Additionally, the Education and Learning division is experiencing an overspend primarily due to rising Special Educational Needs (SEN) transport costs, with a forecast pressure of £464,000. The report also notes potential financial impacts from a proposed London Hire contract extension and increased demand and costs from September.
Significant expenditure pressures are also anticipated in adult social care and temporary accommodation. For adult social care, the drivers are increasing demand, complexity of needs, and provider market challenges.
In temporary accommodation, the primary pressure stems from delays in progressing the activities related to new saving proposals,
which are expected to be fully realised in 2027-28. The Early Year End Forecast 2026-27
report indicates that the main area of overspend in the General Fund is within Growth and Environment, driven by a shortfall against income targets, and within Housing (in relation to Temporary Accommodation).
Councillor Zvikomborero Chihoro, Cabinet Member for Finance and Community Wealth Building, acknowledged the stark financial findings. The council must take every opportunity to reduce spending where it can but maintain our commitment to prioritise and protect our most vulnerable residents, who rely most heavily on our services,
he stated.
To address these challenges, the council is implementing management actions. Within Integrated Health and Adult Social Care, there is a focus on Improving performance in reviewing care packages and placements, targeting areas to ensure care provided is both appropriate and providing good value for money, enabling timely adjustments and cost savings.
This includes Weekly management scrutiny review of all new care packages and placements to ensure appropriateness and cost-effectiveness.
Savings from these reviews are included in the forecast for Adult Social Care, though specific figures are not detailed.
The council is also pursuing a strategy to maximise income to offset the budget gap. Efforts include encouraging client contributions
and implementing revenue generation initiatives.
The Growth and Environment directorate has a substantial savings target for 2027-28, with a significant portion relying on income generation. Furthermore, a capital scheme for electric vehicle (EV) charging points is proposed to enable additional income generation in line with agreed saving.
However, specific projected revenue streams from these efforts are not detailed in the provided information.
The Medium-Term Financial Strategy (MTFS) indicates a budget gap of £19.096 million for 2027-28, rising to £93.217 million by 2029-30. The full details of the council's financial outlook can be found in the Public reports pack.
