Lewisham Council is facing a projected £6.5 million overspend for the current financial year, a significant increase from earlier forecasts, driven largely by escalating costs associated with its parking contract. The Public Accounts Select Committee heard on Thursday, September 17, 2026, that the projected overspend represents a £3.4 million increase since the previous financial monitoring report. Katharine Nidd, Director of Finance, explained that the figures for Period 3, ending in June 2026, are now more granular and reliable than earlier in the year.
The overspend is primarily concentrated within the Place Directorate, specifically linked to the parking services contract. This is described as a contract cost overspend
rather than a shortfall in income. The report notes a known additional cost of £1 million and a further risk of £1 million related to a dispute on last year's costs, amounting to £2.8 million in potential concerns for the parking contract. Catherine Nidd, Director of Finance, stated that There is a known million-pound additional cost, and there is the risk of a further million-pound.
She also mentioned that the contract itself was with the same provider you know, there were there were differences and nuances in terms of what it included how it was to be operated and um i think the claim is effectively part of around that that sort of pricing model and and and how effectively the costs of the contract get built up.
Additionally, discussions and negotiations around changes in the London Living Wage and national employer increases are contributing to commercial discussions around contract costs.
Councillor Gavin Moore expressed concern about the recurring issues in parking services, while Councillor Claire Wills sought clarification on the contract term. Officers confirmed the contract was relatively new and still bedding in,
having just finished its first year of operation. Catherine Nidd, Director of Finance, noted that It takes a while for the contracts to bed in, and you are right in that there is, you know, an element of finding our feet.
Senior officers and the cabinet member have been briefed on the situation. Councillor James Rathbone noted that the provider was not new to the council, having held the previous contract.
Regarding measures to address the overspend, Ms. Nidd stated that in terms of what our office is doing about that, it is going to the highest level. So, Steve Everson, the exec director, is personally involved and is personally having those discussions with the contractor at the highest level. The cabinet member has been briefed. A number of cabinets have been briefed. So, there is very clear visibility at the most senior level within the council, both an officer and member level, in terms of getting that assurance that the officers and the council as a whole is collectively, you know, being as commercial and acting as appropriate as possible to drive value from those contracts.
She also highlighted that potential savings linked to new traffic calming or enforcement measures could be impacted by changes in public behaviour.
In response to questions about the broader implications of the overspend, Councillor Nick Torry asked about the broader implications of the overspend for subsequent years' finances and reserves.
Katharine Nidd, Director of Finance, explained that in-year overspends would fall to corporate provisions and then reserves.
However, she cautioned that the persistent nature of costs in children's and adult social care meant that the £6.5 million overspend could recur, effectively increasing the savings target for future years. This implies that persistent overspends would necessitate larger savings targets in the future, potentially impacting financial stability if not addressed.
For more details on the council's financial reports, refer to the Public reports pack presented to the Public Accounts Select Committee. The committee's agenda can be found here.
