The Finance and Budget Scrutiny Committee of Lambeth Council met on Thursday 17 September 2026 to review the council's first quarter financial performance and revised forecast for the year. The committee discussed a projected £9.3 million General Fund overspend, which, while an improvement on previous forecasts, remains a significant challenge. Discussions also covered the Housing Revenue Account, asset disposals, and various departmental budgets, with particular attention paid to savings delivery and management actions.

Quarter 1 Results and Revised Forecast

The council is forecasting a £9.303 million overspend for the General Fund at the end of the first quarter of the financial year. This represents a favourable movement of £1.676 million from the previous month's forecast. Councillor Zvikomborero Chihoro, Cabinet Member for Finance and Community Wealth Building, presented the report, highlighting that while the improvement is encouraging, significant challenges remain. Corporate Directors and Directors are expected to continue to focus on cost control and the implementation of mitigating actions.

The Housing Revenue Account (HRA) is forecasting a surplus of £2.544 million, attributed mainly to reduced interest on borrowing and lower void losses. However, the Dedicated Schools Grant (DSG) is projecting an overspend of £13.4 million, primarily due to pressures within the High Needs Block related to an increase in the number and complexity of children and young people with Education and Healthcare Plans.

The Capital Investment Programme is forecasting a net underspend of £20.5 million, largely due to anticipated delays in spending, with some of this slippage being reallocated to cover accounting implications for temporary accommodation and housing needs long leases.

Key Areas of Discussion and Concern

Savings Delivery: A significant focus of the meeting was the delivery of savings. The overall savings gap for 2026-27, excluding staff savings, was £19.803 million. The Growth and Environment Directorate accounted for the largest portion of this gap, with pressures related to parking and events. The report indicated that while staff savings have been allocated to directorates, there are concerns about the timing and full-year impact of these savings, leading to an £8.153 million gap in staff savings delivery.

Temporary Accommodation (TA): The Housing Services (General Fund) budget showed a projected overspend of £5.576 million, with Temporary Accommodation being the primary driver. Management actions are in place to reduce the number and cost of nightly-paid temporary accommodation, including incentives for move-on to the Private Rented Sector and the transition to longer leases. However, delays in implementing some savings proposals mean the full benefit will not be realised until the next financial year.

Use of Consultants and External Advice: Trade union representatives, Ruth Cashman, Susan Matthews from Unite, and Patricia Ennis from GMB, raised concerns about the council's reliance on external consultants and legal advice, particularly when in-house capacity exists. They questioned the value for money and the consistency of this approach with efforts to reduce expenditure. Councillor Chihoro and Zena Cooke, Corporate Director of Resources, explained that all legal advice requires sign-off by the head of legal and that external advice is sometimes sourced at competitive rates. They also stated that the use of consultants is scrutinised and justified through a spend control process.

Libraries: Concerns were raised by Ruth Cashman regarding potential cost-saving measures affecting the library service, despite political assurances that there would be no cost to the service. It was clarified that while a £498,000 saving was initially budgeted, the forecast saving is now zero, with efforts focused on income generation and service enhancement rather than cuts.

Senior Management Costs: Trade unions highlighted a significant increase in spending on senior management grades (SMG3 and above) and staff earning over £100,000, questioning the justification for this rise at a time of proposed frontline cuts. The committee discussed the ongoing restructure within the Growth and Environment Directorate and the application of organisational design principles to management layers.

Parking Income: Questions were raised about the shortfall in parking income and the proposed mitigation measures. It was noted that while some parking income targets were not met due to delays in capital investment for EV charging and other infrastructure, income is expected to improve in the next financial year.

Asset Disposals: The progress on asset disposals to meet the planned repayment of Exceptional Financial Support (EFS) was discussed. It was confirmed that the asset disposal programme has been paused pending a review of the administration's policy, and a full report will be presented in the next meeting.

Capital Investment Programme: The committee noted the significant forecast underspend of £20.5 million in the Capital Investment Programme, with £18.9 million attributed to the General Fund. This is partly due to the pause on borrowing-funded projects and challenges in accurately profiling capital spend.

Flexible Use of Capital Receipts: The report detailed the commitment of £5.3 million of capital receipts for transformation projects, primarily within Finance, and £3 million for the HRA. Concerns were raised about spending capital receipts faster than they are being generated.

Work Programme and Future Scrutiny

The committee reviewed its work programme, with future meetings scheduled to focus on Quarter 2 financial performance, savings proposals, the asset disposal programme, and the Landers report. Potential areas for deeper scrutiny in future meetings include management restructuring, income projections, the use of Section 106 funds, and maximising income from assets. A working group will be established to explore maximising income from assets.

The meeting was attended by Councillor Chris Nicholson (Chair), Councillor Judith Cavanagh, Councillor Dominic Lynch, Councillor Bryn Scott, Councillor Amelia Shoebridge, Councillor Matt Wilcock, Councillor Zvikomborero Chihoro (Cabinet Member for Finance and Community Wealth Building), and officers including Zena Cooke (Corporate Director of Resources) and Jacqueline Pennycook (Interim Director of Finance).