Lambeth council faces £39m black hole after coronavirus spending

By Grainne Cuffe, Local Democracy Reporter

A town hall fears it may have to slash crucial projects and staff because it has only been given £20million of the £59m it has spent combating the coronavirus crisis.

Lambeth council faces a huge spending black hole of £39 million if no more funding is received.

Committee members grilled the council leader and cabinet members last week over footing the bill for children in care, foster care placements, free school meal vouchers, schools and children not having access to the internet or laptops.

Members also raised concerns about shielded residents, care homes data, the protection of council staff, and housing issues emerging as a result of the pandemic.

Councillor Marianna Masters said she was “very concerned” about the council’s finances in the wake of the crisis.

She said: “I’m still very, very concerned about the fact that, for whatever reason, the Government gave an early indication that we would need to spend whatever we would need to spend, and now there seems to be a reining back on that.

“The strategy that we’re hearing from your summary was very much dependent on working together with voluntary sector partners, but no one is really addressing the fact that these partners are in the most precarious times and at massive risk of not being viable.”

Andrew Travers, the council’s chief executive, said the Government must step in with additional funding.

He said: “We know that we have a very serious issue if the Secretary of State and the Government do not meet their commitments and leave us with the additional costs that we’re incurring.

“In our latest return on finance, submitted last week, we are estimating a cost and loss of income which totals £59 million, excluding business rates, and we have so far received £20 million from Government.

“It’s absolutely clear to us and to all local government that the Government will be needing to step in with additional funding to support us and all other councils,”

The Treasury is currently not commenting on speculation about future costs.

A spokeswoman said: “As the Chancellor has said, it’s too early to speculate on these things, but what we do know is that we’re facing a time of unprecedented economic uncertainty.

“What’s clear is that if we had not acted in the way that we did at the scale and speed that we did, the situation would be far worse.

“That’s something that the OBR and the Bank of England have both confirmed.”

Pictured top: Chancellor of the Exchequer, Rishi Sunak (Picture: PA)