Lambeth (Parliament Politics Magazine) – Lambeth Council has begun preparations for its 2026 Budget, set to be presented to the Full Council in February as part of the annual financial process.
“Financial challenges,” “funding pressures,” and “structural deficits” are frequently mentioned in the most recent report before the Budget, which will be considered at the Overview and Scrutiny Committee on November 19 at the Town Hall.
While Westminster’s Conservative cuts have served as a handy political scapegoat for previous Town Hall budgets over the past fifteen years, the Labour Group now finds itself in the awkward situation of having a Labour administration in power nationwide.
The fact that Steve Reed, MP for Streatham and Croydon North, is the new Minister for Local Government adds to the difficulty.
Lambeth Council Leader Claire Holland is now the epitome of a hotline to Whitehall, if such a thing exists, based on the tone of this most recent report.
The scope of Lambeth’s impending financial crisis is revealed in the Finance Planning and Budget Proposals report.
According to the council’s Medium-Term Financial Strategy (MTFS), rising demand, inflation, and stagnant government financing would all contribute to a growing budget deficit in 2026–2027.
Lambeth still faces a multimillion-pound deficit unless new sources of income and savings are identified, despite Council Tax hikes being capped at about 4.99% (including the adult social care precept).
Lambeth is running out of simple victories despite years of “efficiency savings” and “transformation programs.” The report acknowledges that in order to keep the budget balanced, more structural changes would be necessary.
Particularly strained service regions include:
- adult social care, where demands from complexity and demographics are still growing;
- children’s services, where placements outside of the borough pose an increasing financial risk;
- homelessness and short-term housing, where overspending is being caused by growing demand and rent;
Additionally, the Housing General Fund was negatively impacted by increased borrowing costs for major projects.
Although Lambeth’s finance officers maintain that the borough is currently financially healthy, it is evident that the easy options are long gone and reserves cannot be relied upon indefinitely.
The Finance team is proposing a renewed emphasis on “efficiencies” to close the gap; while this may seem more appealing than “cuts,” it frequently amounts to the same thing.
Among the suggested actions are:
- automation of standard procedures and digitalization of back-office services;
- integration of social, housing, and health services;
- rationalization of assets, including potential sales of buildings and land;
Lambeth will continue to “prioritise support for vulnerable residents,” according to officers, and all spending decisions will be in line with the Lambeth 2030 Borough Plan, which is the council’s long-term plan centered on equity, justice, and climate action.
However, the underlying message is difficult to overlook: “efficiencies” frequently result in fewer employees, slower services, and more annoyance when inflation exceeds your money.
This is a particularly difficult political situation for Labour in Lambeth. The borough’s leadership may rightly blame Conservative austerity for every service cut and increase in council taxes for more than ten years. Now, that line is more difficult to wash.
The borough’s leadership can’t really claim ignorance with a Labour administration in power and one of their own MPs serving as the Local administration Secretary.
Former Lambeth Council Leader Steve Reed is currently in charge of the same division that controls funding for town halls around the nation. To be honest, it is difficult to see Lambeth pleading poverty when one of its political alumni has access to the financing cupboard.
Next week, the Overview and Scrutiny Committee will review the plan as usual. However, no significant decisions are anticipated until December, when the Cabinet approves the next stage of the Medium-Term Financial Strategy.
The Full Council will discuss the final 2026 Budget in February; by then, the extent of any further savings will be known.
How will proposed cuts affect adult social care and children services?
Proposed cuts in Lambeth Council’s 2026 budget will affect adult social care and children’s services, both of which together consume further than two- thirds of the council’s budget. While the council aims to cover vital services, the severe fiscal pressures mean that some reductions may be necessary.
For adult social care which presently has a budget of around £107 million, the council faces growing demand due to a growing population and increased requirements among vulnerable grown-ups.
Children’s services, with an estimated budget of about £90 million, face challenges due to adding figures of children taking social care intervention and safekeeping. Some specialist support brigades, similar as the Contextual Safeguarding Team addressing youth violence pitfalls, have faced cuts in once proffers, raising enterprises about the long- term impact on vulnerable young people.
