Lambeth Council is set to close children’s centres and hike parking charges as part of a £50 million package of savings unveiled in an attempt to balance the books.
Streetlights could be dimmed at night, less money will be available for campaigns promoting healthy eating and exercise and AI will be used to automate processes under the plan set to go before the council’s Labour cabinet on Monday.
Councillor David Amos, cabinet member for finance, has said the local authority is facing its ‘worst ever funding crisis’, with the council expected to find £69 million in savings over the next four years.
Lambeth’s finances are buckling under the soaring cost of temporary accommodation for homeless families, which is now costing the council £90 million a year—£29 million more than forecast and up a third in 12 months.
The number of homeless families supported by Lambeth has surged by 50 per cent in the last two years to around 4,600.
The council is spending £250,000 per night on temporary accommodation for households in the borough.
While councils across the capital are struggling under increasing demand for temporary housing, officials believe Lambeth is particularly affected because it has in the past struggled to move families out of such accommodation.
In March, the council’s Labour cabinet approved changes to its housing allocation policy to give families in temporary accommodation higher priority on the local authority’s waiting list for council properties.
A report outlining the changes said the policy would “increase the number of lets to homeless households and reduce reliance/spend on nightly paid accommodation.”
A further measure aimed at reducing the number of Lambeth families in temporary accommodation is expected to be rubberstamped by the council’s Labour cabinet on Monday.
The policy will allow the local authority to discharge its housing duty (the council’s legal responsibility to provide housing to someone who is homeless) through the offer of private rented accommodation, which it hasn’t been able to do so far.
The council is also in talks to acquire leased accommodation outside of Lambeth to house families in temporary accommodation, as an alternative to expensive nightly paid accommodation like hotels.
Officials have accepted that both policies will result in more families being placed outside of the borough. Ruth Hutt, the council’s acting corporate director for housing, refused to say where the leased accommodation could be, when asked by Cllr Annie Gallop at a scrutiny meeting on Monday.
Council documents presented to a housing scrutiny meeting in July said that Lambeth was in advanced negotiations to take on new build developments in Dover in Kent and Luton in Bedfordshire.
Once the £50 million package of savings is approved by cabinet on Monday, Lambeth still has to find a further £20 million in cuts or income over the next four years to balance the books.
The council’s housing revenue account (HRA), which registers costs and income related to the local authority’s housing stock, has recorded year on year deficits.
Lambeth has blamed this on government social rent rise limits not keeping pace with inflation, the cost of additional regulation and increasing legal disrepair claims lodged by tenants.
In March 2024 the HRA had £14 million of reserves, which are expected to reduce to just £5m by March 2025 and disappear altogether by the following year.
The council’s in-house disrepair arbitration scheme, which aimed to reduce legal costs by allowing tenants to make compensation claims directly with the council, has been suspended since July. Ruth Hutt told the scrutiny meeting on Monday that the scheme had failed to get tenants to bypass solicitors and make claims with the council directly.
