Essential services under threat if Lewisham council coronavirus deficit not covered by government

By Grainne Cuffe, Local Democracy Reporter

Lewisham council will have to cut essential services if the government does not cover the full cost of Covid-19, according to a new report.

The financial monitoring report for 2020/21, due to go before mayor and cabinet tonight, forecasts an overspend of £25.6 million, most of which is made up of pressures on the children and young people (CYP) directorate.

The figure takes into account government funding for the Covid-19 response in Lewisham, which is expected to exceed £50 million.

Secretary of State for Housing, Communities and Local Government, Robert Jenrick, recently announced an extra £500 million for councils, but local authorities say it will cover “only a fraction” of the cost of the pandemic.

Lewisham has warned that without “substantial extra funding” from government, “it will be impossible for local authorities to balance their budgets whilst adequately maintaining essential services”.

The report said: “Taking the estimated costs and lost income considerations of the Covid-19 response and additional support from government into account, the council has sufficient reserves to meet these financial commitments at present.

“However, without further investment, it is highly likely that members will be faced with some difficult choices and will be met by the inevitability that the council will need to both look different and be required to reduce and cease services in the long term.”

Although nearly half of the anticipated £22.5 million overspend on CYP is down to the pandemic, the non-Covid-19 related £12.4 million overspend is nearly double that of the previous year (£6.7 million).

Councillor Amanda De Ryk, cabinet member for finance and resources, said: “Lewisham council has been on the frontline of fighting coronavirus and our priority will always be to protect the most vulnerable in our community.

“Like all local authorities across London and the country, our emergency response to the pandemic has had a significant impact on our finances.

“The government previously promised to do ‘whatever it takes’ to support local councils to meet the cost of Covid-19, but has since indicated that it will not cover all costs and lost income.

“We are urging the government to properly fund local councils, as failure to do so will unfortunately mean some very difficult decisions on vital services that our residents need.”

Council officers will put forward a ‘stabilisation’ budget in the autumn to confirm the position for the remainder of the financial year.

Pictured top: Lewisham civic centre