The Overview and Scrutiny Committee of Lambeth Council met on Monday 26 January 2026 to discuss the council's financial strategy and developer contributions. Key decisions included the approval of savings proposals to address a significant budget gap, and a commitment to enhance transparency and community involvement in the allocation of developer contributions.

Budget and Medium-Term Finance Strategy

The committee reviewed the council's challenging financial position, exacerbated by over a decade of reduced government funding and increasing demand for services, particularly in temporary accommodation, adult social care, and children's services. Councillor Judith Kavanagh, the interim Cabinet Member for Finance, presented an update on the Medium-Term Financial Strategy (MTFS), outlining further savings proposals totalling £18.643 million over the MTFS period, with £7.679 million to be realised in 2026/27. These proposals aim to close an estimated budget gap of £84 million over the MTFS period and put the council on a path to financial sustainability by 2027-28.

Trade union representatives, Simon Hanna (Unison), Susan Matthews (Unite), and Patricia Ennis (GMB), raised concerns about the council's reliance on consultants, the potential negative impacts of savings on equality and diversity (EDI), and the lack of transparency regarding Equality Impact Assessments (EIAs). They also questioned the effectiveness of the spend panel and the depletion of reserves.

Councillor Ben Curtis highlighted concerns about the reliance on Exceptional Financial Support (EFS) from the government and the fallback position if this funding is lower than anticipated. Councillor Scott Ainslie echoed these concerns, noting the late publication of papers and questioning the robustness of the savings figures, particularly in light of reduced services and rising council tax.

Officers explained that the application for EFS was underway, with a decision expected in February. They also detailed the council's approach to managing adult social care savings, focusing on improving outcomes and promoting independence, with a target saving of approximately 1.4% for the coming year. The committee also discussed the Housing Revenue Account (HRA) and its recovery plan to rebuild reserves to 10% of net revenue expenditure within three years.

Several specific savings proposals were questioned, including those related to parks operations, parking charges, and the Lambeth Country Show. The committee also discussed the issue of housing disrepair cases and the ongoing efforts to manage and reduce them.

The committee agreed on a series of recommendations, including ensuring EIAs are considered and made public, investing to save, safeguarding reserves, and receiving quarterly updates on savings delivery, particularly concerning temporary accommodation, social care, and borrowing costs. They also requested greater detail in the description of savings proposals and for officers to provide clarification on specific items such as park restructuring and parking charge increases.

Developer Contributions: Community Infrastructure Levy (CIL) and Section 106 Planning Obligations (s106)

The committee reviewed the use and allocation of developer contributions, including the Community Infrastructure Levy (CIL), Neighbourhood CIL (NCIL), and Section 106 (s106) planning obligations. Councillor Danny Adilypour, Deputy Leader for Housing, Investment and New Homes, introduced the report, highlighting its comprehensive nature and the importance of these contributions in delivering infrastructure and services.

Teo Adesina from Trash Gang Academy CIC spoke about the vital role of NCIL funding in supporting grassroots organisations that work with young people, emphasizing the need for longer-term funding to ensure programme continuity. Ted Inman from Southbank and Waterloo Neighbours (SOWN) raised concerns about the lack of community engagement in the allocation of s106 and strategic CIL funds, arguing for a greater local input into mitigation priorities and investment decisions.

Rob Bristow, Director of Planning and Sustainability, explained the council's robust process for dealing with developers' viability assessments to maximise affordable housing and secure planning obligations. He noted that while the council strives to achieve policy thresholds, viability challenges can necessitate negotiation, with external valuers providing advice. Late-stage viability reviews are also conducted to capture any uplift in scheme value.

Councillor Tim Windle inquired about the uncertainty in forecasting developer contributions and the process for awarding funds to local projects. Officers explained that forecasting is a complex task, incorporating assumptions about non-commencements and developer engagement. The allocation of funds is guided by strategic documents like the Infrastructure Delivery Plan (IDP) and the Borough Plan.

Councillor David Oxley raised concerns about unspent developer contributions and the governance of spending decisions. Officers clarified that CIL and s106 funds are allocated based on strategic documents and member-approved reports, with a new capital programme review aiming to enhance oversight and transparency.

Councillor Ben Curtis sought clarification on the distinction between CIL and NCIL, and how unused s106 money could be invested. It was explained that CIL is governed by national regulations, while NCIL involves community engagement, and s106 is a legally binding site-specific obligation. The council is exploring ways to better utilise unspent s106 funds, potentially contributing to revenue costs where regulations permit.

Concerns were also raised about developers using viability assessments to reduce obligations and the process for enforcing compliance. Officers confirmed that while developers cannot be blocked for non-compliance, more frequent monitoring and scrutiny can be applied. The council also encourages developers to secure Registered Providers (RPs) for affordable housing units early in the process, with payments in lieu being a last resort.

The committee discussed the governance and decision-making processes for allocating developer contributions, with officers explaining the distinction between strategic CIL, neighbourhood CIL, and s106. While NCIL involves direct community engagement, strategic CIL is guided by borough-wide infrastructure needs, and s106 is site-specific.

Councillor Scott Ainslie questioned the transparency of reporting on s106 funds and the council's enforcement activities. Officers stated that while an annual Infrastructure Funding Statement (IFS) is published, they are exploring ways to enhance transparency, potentially through more detailed quarterly reports. They also detailed the structured enforcement process for non-compliance.

The committee agreed on several recommendations, including ensuring financial viability assessments do not create loopholes, maximising the allocation of unspent s106 and CIL funds, encouraging community involvement in decision-making, providing greater continuity of funding for grassroots organisations, and enhancing transparency in reporting on developer contributions.

Work Programme

The committee reviewed its work programme for the remainder of the municipal year. Items scheduled for future meetings include the Safer Lambeth Partnership, Temporary Accommodation Procurement Strategy, environmental protection and enforcement, and the selective licensing scheme. Members were invited to suggest additional items for inclusion. The committee agreed to the proposed work programme and noted the action monitoring log.