Lambeth Council has unveiled its budget plans, highlighting urgent actions and tough decisions required to address its “extremely challenging and perilous financial future.”
Lambeth Council has unveiled its budget plans, revealing a critical need for drastic savings amidst what it describes as an “extremely challenging and perilous financial future.” The council faces an unprecedented funding gap driven by structural underfunding from central government, soaring demand for statutory services, and spiralling costs.
The council has outlined savings of over £99 million required over the next four years to stabilise its finances. These measures stem from mounting pressures on essential services, including temporary housing and social care for adults and children. Next year alone, the council will need an additional £45.9 million to fund statutory services, with a further £46.3 million in savings required in 2025/26. Over the following years, an additional £49.8 million must be identified to ensure the council’s budget is balanced.
Lambeth has seen a sharp rise in demand for temporary accommodation, with homeless households increasing by 50% in the last two years. Currently, the council supports 4,600 homeless households, and the cost of providing overnight accommodation for these families is expected to hit £100 million this year—£30 million more than initially budgeted.
Cllr Claire Holland, Leader of Lambeth Council, highlighted the depth of the crisis:
“The cost of providing vital public services for the most vulnerable in our communities has spiralled, leaving us in an unsustainable financial position after years of chronic underfunding by central government. Following 14 years of austerity and a series of government failures to deliver much-needed reforms, we are facing the worst funding crisis this council has ever experienced.
“We’ve picked the low-hanging fruit. Councils across London are now at breaking point. Saving this amount isn’t possible without impacting the services residents rely on.” To address the crisis, the council is proposing a 2.99% increase in Council Tax and a 2% rise in the Adult Social Care precept. From 2025/26, a Council Tax premium on second homes will also be introduced, alongside the existing premium on empty homes. These measures are expected to help fund essential services while keeping Lambeth’s Council Tax rate among the lowest in the UK.
“The cost of providing the vital public services has spiralled, leaving us in an unsustainable financial position following years of chronic underfunding from central government.”
-Claire Holland, Leader of the Council
Cllr Holland emphasised the council’s commitment to supporting vulnerable residents, noting that Lambeth’s Council Tax Support Scheme remains one of the most generous in London. This is complemented by the council’s Cost of Living Support Programme, aimed at alleviating financial hardships.
Despite a modest increase in funding from the government’s recent financial settlement, Lambeth Council argues it is insufficient to address the scale of its financial challenges. Cllr Holland added: “The local government financial settlement is a start, but it does not go far enough to rebuild local services that have been stripped away by 14 years of austerity.
“We will continue to work with government to address the financial challenges facing councils, particularly in London. Lambeth is on the frontline of the national housing crisis and bears the brunt of its impact.”
Housing services, funded separately through the council’s Housing Revenue Account, are also under immense pressure. Years of rent freezes, caps imposed by central government, and the additional costs of fire safety work following the Grenfell tragedy have compounded the challenges. Ageing council estates and the withdrawal of improvement funding further strain the budget.
The council is in discussions with the Ministry for Housing, Communities and Local Government to identify solutions. Key priorities include maintaining essential repairs, upgrading estates with new windows and doors, and ensuring building safety.
In addition to addressing its financial challenges, Lambeth remains committed to preserving vital public services. Cllr Holland acknowledged the difficulties but reaffirmed the council’s focus on protecting its most vulnerable residents: “Delivering a balanced budget is incredibly challenging, but it is vital to ensure the survival of essential services that so many in our community depend on.”
The budget proposals will be reviewed by the council’s Cabinet on 24 February before being considered at Budget Council on 5 March. If approved, these measures will mark the beginning of what is likely to be a long and arduous path toward financial stability. This financial crisis underscores the ongoing challenges faced by local authorities nationwide, highlighting the urgent need for meaningful reform and sustainable funding solutions to safeguard public services for the future.
