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Overview and Scrutiny Committee - Monday 2 December 2024 7.00 pm

December 2, 2024 View on council website Watch video of meeting
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Summary

The Overview and Scrutiny Committee discussed the Council's finances, a proposed regeneration scheme at 49 Brixton Station Road and 6 Canterbury Crescent in Brixton, and street cleaning in Gipsy Hill. The Committee made various recommendations to Cabinet on the Council's finances and the Brixton scheme. The Committee noted the report on street cleaning and a supplementary question was asked.

Finance Planning and Medium-Term Finance Strategy

The Council faces significant financial challenges, with an overspend of £34 million forecast for 2024/25, mainly due to the cost of temporary accommodation (TA).

The Acting Director of Finance explained that the Council monitors its budget monthly and quarterly and works with departments to keep spending under control. The Committee discussed temporary accommodation in detail, with the Director of Housing Transformation, Dami Awobajo, explaining that the high cost of nightly paid TA was a London-wide problem. He noted that Lambeth had historically relied too heavily on this type of accommodation.

Alex Clark, Assistant Director of Housing Needs, stated that Lambeth had been slower than other boroughs to move people out of temporary accommodation. He said that a new policy enabling the Council to discharge its housing duty with an offer of private rented accommodation would be going to Cabinet the following week.

Councillor Nicole Griffiths expressed concern about the impact of the policy, particularly on women, as Housing Benefit often does not cover the full cost of rent in the private sector.

Mr Clark responded that the Council would only offer accommodation where the rent was at or below the Local Housing Allowance rate, and affordability assessments would be carried out to ensure that accommodation was suitable.

The Committee asked why there had been a 16% increase in the number of households in Lambeth needing TA compared to an 8% rise across London. Ruth Hutt, Acting Corporate Director for Housing and Adult Social Care said this was due to the difficulties in moving people out of TA. She noted that, unlike in other boroughs, Lambeth has not used bed and breakfast accommodation for families, but the Council has been unsuccessful in finding cheaper alternatives to nightly paid accommodation.

Ms Hutt added that the Council was procuring leased accommodation on long-term leases to reduce the reliance on nightly paid accommodation. She said that although the number of households in TA was still increasing, the rate of increase had slowed.

Councillor Donatus Anyanwu asked about lessons learned from previous years' attempts to achieve savings, noting that previous attempts had often failed. Councillor David Amos, Cabinet Member for Finance, said that the Council had adopted a robust approach to identifying savings through a joint venture between members and officers, and that Equality Impact Assessments would be carried out. He said the most successful savings programs were those that had been rigorously tested before implementation. Cagdas Canbolat, Director of Finance, confirmed that the Council was maintaining reserves of 8-10% of the net budget, in line with recommendations from the Chartered Institute of Public Finance and Accountancy (CIPFA) 1.

CIPFA is the professional body for people in public finance

The Committee asked for more information on proposals for savings from ‘general contract efficiencies' and ‘processes automation’ and Councillor Liz Atkins, Chair, asked why disrepair claims had escalated. Ms Hutt explained that the increase was due to a combination of factors, including a legacy of delays during COVID, aging housing stock and the activities of legal firms encouraging residents to make claims. She said repairs were improving, but the Council needed to build trust with residents so they would not feel the need to go through the courts.

The Committee asked what the Council was doing to maximise income from empty homes and the second home council tax premium. Councillor Scott Ainslie asked if this included commercial properties.

Councillor Amos confirmed that the Council was already maximising income in line with legislation. He acknowledged that the Council could improve its contract management. He agreed with Councillor Atkins that the Council should penalise underperforming contractors.

Councillor Griffiths asked about the reasons for the high use of agency staff. Ms Hutt explained that this was particularly a problem in Children's Social Care, where Lambeth has high needs and a national shortage of qualified social workers. She said the Council was working to retain staff, but social workers could command higher pay as agency workers.

Councillor Griffiths asked for more information on the Housing Revenue Account (HRA) reserves, which are forecast to drop to zero in the coming years. Ms Hutt said that this was a separate discussion, but that a report would be going to the relevant committee early in the new year.

The Committee agreed the following recommendations:

  1. Keep Overview and Scrutiny Committee informed of performance against savings and income generation targets every six months, and if not met, what is being done to mitigate their shortfall.
  2. Ensure that the impact of proposed savings and increases in charges on the most vulnerable residents are assessed and monitored. Ensure that they are kept safe through service provision and those struggling to afford household essentials such as food and heating are supported financially.
  3. Call on the Council to continue to lobby government on the need for more resources in multi-year settlements for London Local Authorities and Lambeth Council.
  4. On the proposal to align temporary accommodation rental charges with 100% of the local housing allowance, provide those households not covered by housing benefit with support if struggling financially.
  5. To update OSC on the progress in reducing the cost of nightly paid temporary accommodation and securing leased accommodation and in supplying alternative provision for Homes for Lambeth residents.
  6. To keep the Housing Scrutiny Sub-Committee informed of progress made to support temporary accommodation clients into stable accommodation, to prevent the breakdown of tenancies and reduce evictions.
  7. To brief Councillors on these changes and how best to communicate these to residents.
  8. To ensure that more is done to reduce the need for legal disrepair claims by improving the response from housing repairs and working with residents more closely to keep cases out of the court process.
  9. Ensure that contract savings are achieved by prioritising and increasing financial penalties for performance, ending contracts, and ensuring that contracts commissioned offer best value.
  10. Provide OSC with more information on lines 49 and 51 and their implications in relation to savings on contract efficiencies and automation processes.
  11. Ensure that local community organisations funded by the Council promote the interests of local people and contribute to the delivery of Lambeth's Borough Plan outcomes. If not, their council funding should be reviewed and if necessary withdrawn.
  12. Ensure that we continue to maintain a prudent level of reserves within 8 to 10% of net budget.
  13. Ensure that we do what we can to maximise income through the empty property premium and the second home council tax premium.
  14. To provide the Committee with a risk report on the key risks raised.
  15. To provide the committee with clarity on the figures quoted in paragraph 2.2 regarding the number of households in TA.
  16. To take note of the recommendations of the EIA panel and to make sure that those conclusions are included in the consideration of the financial report.

Street Cleaning in Gipsy Hill

Jesse Scharf, a resident of Gipsy Hill, asked why the street cleaning in Gipsy Hill had not improved despite the Council's promise to clean the streets twice weekly when it moved to fortnightly black bin collections. Doug Terry, from Veolia, explained that after refuse collections, every road was litter picked, followed by a second litter pick if needed, three days later. He said the borough's street cleaning was generally achieving a good standard and was independently assessed, but that some areas needed closer attention.

49 Brixton Station Road/6 Canterbury Crescent – Deed of Variation to Contract with Development Partner

Councillor Danial Adilypour, Deputy Leader (Housing, Investment & New Homes), introduced the report. He explained that the Council was seeking approval to amend the previously agreed ‘Minimum Requirements’ for a regeneration scheme at 49 Brixton Station Road and 6 Canterbury Crescent in Brixton. The development is intended to provide new homes, including affordable housing, alongside workspace, infrastructure to support Brixton’s street market, and public realm improvements.

A development agreement was entered into with London Square Developments Limited2 in 2022, but since then, there have been significant changes in the economy, making the original agreement undeliverable. The Council has renegotiated the scheme with London Square, but has had to accept a reduction in the proportion of affordable housing from 50% to 40% and a reduction in the amount of workspace to be provided. The Council will no longer have the right to acquire the affordable homes at market value, due to pressures on the Housing Revenue Account.

Councillor Adilypour acknowledged that these were compromises, but said the Council was confident that a better deal could not be achieved elsewhere in the market, given the current economic situation.

The Committee discussed the changes in detail with Councillor Adilypour, Nabil Khan, Corporate Director of Climate and Inclusive Growth, and other officers. Councillor Griffiths suggested that the Council should seek to include in the agreement a requirement for London Square to offer targeted workspace and grants to local young entrepreneurs.

Jennifer Angus, Senior Development Manager and the lead officer on the project, said that while the Council could not guarantee this, it would work with London Square and the local business community to develop the workspace so that it met local needs.

Councillor Griffiths expressed concern about the impact on existing businesses at the site, particularly on those who had benefited from lower rents. She asked for assurance that they would be able to relocate at no extra cost and that the Brixton night-time economy would not be adversely affected.

Ms Angus said that the Council would support existing tenants to relocate, but it was likely that they would need to move out of the area during the construction phase, and that those who had been paying discounted rents were likely to need to pay more for new premises. She said that the Council and London Square would work to ensure that the night-time economy was not negatively impacted.

Councillor Ben Curtis asked how the Council could be sure that the proportion of affordable housing would not be reduced further. Councillor Adilypour said that London Square would be contractually obliged to deliver at least 40% affordable housing and said he was confident that the figure would not fall below this. He said that a planning application would be submitted the following year and that the percentage of affordable housing could potentially be increased at this stage.

The Committee asked about the involvement of the local community in the scheme. Mr Khan explained that the 20 residents who had taken part in the initial consultation workshops would be involved in future discussions. He said that London Square was contractually obliged to deliver an extensive engagement strategy, including working with local groups such as market traders, young people and residents.

Councillor Verity McGivern asked what the process of renegotiating the scheme had cost, and if the Council would be able to recoup this. Matthew Gaynor, a finance officer, said that the total cost would be around £100,000, but that the agreement with London Square included a £250,000 contribution from the developer towards these costs. Mr Gaynor said that if the Council had decided to re-tender the scheme, the cost would have been between £300,000 and £500,000, plus the delay would have cost the Council around £1 million in temporary accommodation costs.

Councillor Deepak Sardiwal asked if a streamlined procurement process had been considered. Councillor Adilypour said that he was satisfied that the renegotiated scheme with London Square represented the best possible outcome. He acknowledged that there had been some positive changes in the economy, but said that the development sector was still vulnerable to fluctuations in interest rates. He added that he wanted to see the scheme completed by 2030 and therefore did not want to delay it further.

Councillor Sardiwal asked when the scheme was expected to start. Ms Angus said that a planning application was expected in late 2025, with work starting on site in early 2027.

The Committee asked about the Council’s commitment to ensuring that Black, Asian and ethnic minorities and marginalised communities benefit from the development. Ms Angus explained that this would be addressed through the allocation of affordable workspace, with the scoring system weighted in favour of organisations that benefited the community.

In response to a suggestion from Councillor Griffiths, the Committee agreed to recommend that the Council should explore the possibility of offering additional grants to young entrepreneurs from marginalised groups.

Councillor Griffiths asked how the Council would respond if London Square tried to back out of the agreement. Councillor Adilypour said he was confident that the developer was committed to the scheme and that it was contractually obliged to deliver the agreed affordable workspace. He said that London Square was one of the few developers that was increasing its activity in London, rather than scaling back.

Councillor Griffiths asked if the renegotiation provided an opportunity to strengthen the sustainability and carbon reduction aspects of the scheme. Councillor Adilypour confirmed that the Council’s approach to sustainability had been a key part of the discussions.

The Committee agreed the following recommendations:

  1. Calls on the Council to make every effort to maximise the number of affordable homes delivered on this site, to the benefit of local residents and to ensure that the level of affordable homes does not fall below 40%.
  2. Ensure that we again engage a variety of local residents in the development of these proposals, monitor the process and resident satisfaction with it.
  3. Ensure that local people, especially Black, Asian and ethnic minorities and marginalised communities, benefit from this development through entrepreneurial opportunities, apprenticeships, and job opportunities, and through access to the workspace provided, including grants to young entrepreneurs from marginalised groups.
  4. Address the potential impact of high rents on businesses, especially those that are struggling, but providing a valuable service to residents, for example in the night-time economy, to ensure that if necessary, support is provided to enable them to survive and thrive.
  5. Finally, ensure that safeguards are put in place to ensure that further changes are not needed to secure the development of this site.

The Committee noted the work program and agreed the recommendations report.


  1. London Square is a property development company, mainly operating in London and the South East of England