A South London council facing a budget black hole worth £18million this year is set to cut the number of senior staff as well as a recruitment freeze in order to balance the books.
Lambeth Council’s cabinet members approved the “urgent” cost cutting measures during a meeting on Monday evening (July 28).
The South London authority estimates it will be able to save more than £1m each year by cutting the number of directors and corporate directors by October.
It also plans to end all non-essential spending and there will be a pause and review of the council’s capital investment programme to reduce costs.
But it’s not just this year’s £18m projected overspend that the council is concerned with, as its 2026-27 budget gap has increased by some £26.6m in the space of a few months.
As part of its MTFS (Medium Term Financial Strategy) which was presented in March of this year, the council was reporting a £23.3m funding shortfall for 2026-27, but this has now jumped to £49.9m.
Claire Holland, leader of Lambeth Council, said the updated MTFS represented an “extremely challenging financial position”, and said the council will need to find an extra £84m in savings over the next four years to address continued demand in services such as temporary accommodation, adult social care and children social care.
Cllr Holland told cabinet: “This is in addition to the £99m that the council is already having to make and that was agreed by full council in March, I appreciate these are big numbers.
“So we’re going to continue to lobby the government to work with us and to avoid funding a cliff edge to ensure that we are able to continue to protect key services that our most at-risk residents rely on. We will continue to be on the side of our residents and those who need us most.”
Cllr Holland added: “We’re taking the tough action here in Lambeth needed to secure the council’s future as responsible representatives, we’re going to continue to do all we can to protect the frontline services that our residents rely on but we know it’s a challenge.”
She went on to say “difficult decisions” will need to be made to ensure the council stays financially afloat.
Opposition councillor for the Greens, Nicole Griffiths said while she appreciated the updated report and acknowledged officers were doing their “absolute best” to protect frontline services, she said it was “obvious” more budget cuts are on the horizon.
Cllr Griffiths said: “What the cabinet won’t acknowledge is that this Labour government has made the political choice to continue austerity. Lambeth is a Labour council and we have a national Labour government.
“Yes officers are responding to the consultation on funding formulae, but what is this council doing politically to fix Lambeth’s funding crisis for residents?”
She added: “Lambeth Labour needs to stop blaming past governments and act courageously and immediately to stop this nonsense.”
However later on in the meeting, Cllr Holland dismissed Cllr Griffith’s comments, and said they were “simply inaccurate”.
Speaking to cabinet members, Cllr Holland said: “I take my hat off to you, all the hard work you’re [doing] and the lobbying that you continue to do politically and that we do collectively as Lambeth and that we do across London as London Councils.
“We’re doing it as creatively as possible, with different angles and different avenues. Unrelenting, has been our lobbying and we will continue to be so because as I said Lambeth Labour is on the side of Lambeth residents, that’s who we represent and will continue to advocate for Lambeth residents and represent them.”
