Statement from the Mayor
This week Lewisham’s Mayor and Cabinet will discuss the Council’s financial position, with our regular budget monitoring report on the agenda at our meeting on Wednesday.
Lewisham has a history of strong financial management, and we will remain focused on doing everything we can to reduce the deficit while continuing to provide vital services. We will also continue to make Lewisham’s voice heard and lobby the Government for a fair deal and an overhaul of how councils are funded. We are committed to being transparent about the financial situation and will keep residents updated.
As the report sets out, we are facing unprecedented financial challenges, as the demand for - and cost of delivering - our services continue to increase, while our budget feels the impact of 14 years of underfunding for public services. In real terms, we would be spending £1,100 more per household in 2024 if it were still funded at 2010 levels.
Councils across the country are feeling the impact, but especially those in London, where we face a combined shortfall of over £700m next year.
In Lewisham, our overspend for 2024/25 is now expected to be over £27m after using £9m of one-off measures.
Despite having invested additional funding in key services for 2024/25, it has simply not been possible to meet spiralling demand within our existing budget.
Our overspends reflect broader pressures on our communities and those being experienced by councils across London and nationally. For example, the housing crisis has led to over 3,000 households being forced to live in temporary accommodation in Lewisham alone, the cost of which is skyrocketing to £85m a year, up from £65m last year (an increase of 30%).
The cost of supporting children with social care has increased 12% - or £9m - from £72m to £81m. Likewise, the cost of supporting adult social care needs has increased, as we see more and more complex requirements, leading to a predicted £5.7m overspend.
We are bringing forward savings in November but even with these the Council is predicting a shortfall of over £35m for 2025/26. Reserves will have to be used to offset the overspend this year and support next year’s budget until measures are agreed to balance the budget. Our leadership team and Cabinet are working hard to bring this figure down, with a comprehensive series of transformation programmes aimed at making our services more efficient and reducing costs.
There’s no denying this will have an impact on the services residents receive – particularly the services we do not legally have to provide. Our dedicated, hardworking staff are doing their absolute best to provide the services residents deserve and expect, but we are already a much smaller council than we were in 2010.
We will have a better understanding of the challenge ahead when the Chancellor publishes her budget at the end of this month, and when the Local Government Finance Settlement is confirmed in December.