Lewisham Council is facing a projected £6.5 million overspend on its General Fund for the 2026/27 financial year, an increase of £3.4 million since May. The overspend is primarily attributed to rising costs in the Parking contract within the Place Directorate and increased school transport expenses in the Children and Young People Directorate.
During a meeting of the Public Accounts Select Committee on Thursday, 17 September 2026, Katharine Nidd, Director of Finance, presented the Period 3 financial monitoring report. She explained that the General Fund overspend has worsened due to increased costs in parking services and higher school transport expenses.
The Children and Young People's Directorate's forecast overspend has doubled to £3.6 million. This significant increase is primarily driven by higher costs for children in care and residential placements. Additionally, Education Services has seen a substantial shift due to transport costs associated with an increase in Education, Health and Care Plans (EHCPs), contributing a million-pound pressure to the General Fund, rather than the Dedicated Schools Grant high needs block. 
The Place Directorate is now reporting a £1.3 million overspend, predominantly linked to the Parking Services contract. This is described as a service cost overspend rather than a shortfall in income. Councillor Claire Wills sought clarification on the contract term, and officers confirmed it was relatively new and bedding in,
having just finished its first year of operation. While the exact term and renewal clauses were not specified, it was mentioned that senior officers and the cabinet member were briefed on the situation. Katharine Nidd indicated that the contract is most likely a five year contract
but could be longer, such as seven or ten years, if necessary for infrastructure or equipment investment. She committed to providing a briefing note on the matter. Councillor Rathbone noted that the provider was not new to the council, having held the previous contract. Councillor Gavin Moore expressed concern about recurring issues in parking services, noting a potential further risk of £1 million due to a dispute on last year's costs, amounting to £2.8 million in potential concerns for the parking contract. This dispute concerns a claim for costs attributed to the previous financial year, which the council has rejected, but the company believes the debt is still outstanding. This differs from the contract cost overspend as it relates to a dispute over past costs rather than current operational expenditure. Councillor Moore also commented on the recurring nature of issues in parking services, suggesting he is catching up on the events of the past 20 years
regarding the parking contract. He also noted hearing about a small number of children going into residential care. An expansion in our costs and special needs transport and severe difficulties in adult social care delivering on savings targets
on an annual basis now for many years in local governments.
Risks highlighted in the report include a high level of risk in Children's Social Care concerning placement sufficiency savings, with an estimated risk of £7.4 million. The report states that while there has been robust review of placement costs for under 18s, this has not been replicated for over 18s, and costs are increasing at a rate significantly higher than the rest of London. The current forecast is based on young people in the service and savings achieved to date, with no growth in the forecast for placement numbers increasing or assumptions around savings being forecast until they are achieved. The potential impact on vulnerable children is implied through these increasing costs and the risk that savings may not be achieved, which could affect the resources available for these services. 
Further details on the council's financial position can be found in the Public reports pack for the Public Accounts Select Committee meeting on 17 September 2026. Public reports pack
