Lambeth: Autumn Statement fails to close huge funding gap

22 November 2023

Written by: Lambeth Council

Council statements and updates - News and announcements - Post Type

Lambeth Council is still facing a £38million funding gap after Chancellor Jeremy Hunt’s Autumn Statement “totally failed” to provide the money to properly fund the services thousands of residents depend on.

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Senior councillors said Mr Hunt had ignored their warnings about the need for significant, long-term support to help councils cope with the devastating impact of high inflation and increased demand for front-line services.

Lambeth Council Leader, Cllr Claire Holland, and Finance and Cost of Living lead Cllr David Amos had written to the chancellor in advance of his Autumn Statement, setting out the “precarious financial position local councils find themselves in” following more than a decade of austerity.

Their joint letter urged Mr Hunt to provide wide-ranging help through a series of measures, including an increased, multi-year funding settlement to provide certainty for councils, sustainable and long-term funding for homelessness services, and more funding to build new council houses.

But, although the Chancellor’s Autumn Statement did unfreeze the local housing allowance, which he said would provide an average of £800 of support next year, it failed to address the wider demands set out by Lambeth and councils across the country.

London Councils has warned that the Autumn Statement will leave boroughs facing massive financial pressures, with many struggling to balance their budgets this year. The cross-party organisation also predicted that the capital’s homelessness crisis and wider pressures on social care will remain a “critical risk” to town hall finances across the capital. Lambeth’s own financial planning estimates that, over the next four years, the council faces a daunting £38 million budget gap.

Cllr Claire Holland said: “After 13 years of austerity, local government is at financial breaking point. Councils collectively across London will need to find £600m of savings for this year plus a further £500m of savings by next April, while still delivering core services.

“In Lambeth we are facing a funding gap of £38m over the next four years. According to the Institute for Fiscal Studies, Lambeth is receiving £49m less per year than is needed to meet the needs of its residents.

“The unfreezing of housing allowance for the lowest 30%, is a welcome necessity. But overall, this Autumn Statement hasn’t done nearly enough to meet the challenges facing Lambeth residents.”

Lambeth has maintained key services and provided extra support for the communities worst hit by the pandemic and the cost-of-living crisis. For example, the council has distributed a £10m package of targeted financial support for those who are struggling, supported more than 27,000 households struggling to pay their bills, and distributed free school meal vouchers in the holidays for families on low incomes. Almost 18,000 households have had their council tax bills slashed to nil as part of the expanded council tax support scheme.

But, in the run-up to the Autumn Statement, the council clearly signalled that immediate government support was essential to protect essential services in Lambeth and ensure the wellbeing of its residents.

Cllr Holland added: “These announcements totally fail to tackle the issues we have highlighted, so Lambeth is still looking at a £38m funding gap.

“While the tax reforms may put a few more pounds in people’s pockets, they go no way to supporting vital services that are chronically underfunded. Incentivising faster planning applications does not combat the core issue of a lack of viable housing stock.

“Without addressing these concerns, the Chancellor and Government will be failing people in Lambeth and preventing the Council from helping alleviate the problems facing so many.”