Lewisham Council will have to cut essential services if the Government does not cover the full cost of Covid-19, senior councillors have been warned.
A report due to be presented to elected mayor Damien Egan and his cabinet tomorrow forecasts an overspend for this year of £25.6 million, mostly on services for children and young people.
The figure takes into account Government funding for the Covid-19 response in Lewisham, which is expected to exceed £50 million. Communities secretary Robert Jenrick recently announced an extra £500 million for councils in England, 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 the government “it will be impossible for local authorities to balance their budgets whilst adequately maintaining essential services”.
“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,” the report warns.
“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,” according to the report.
Although nearly half of the anticipated £22.5 million overspend on children and young people 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). Extra Covid-19 costs include home to school transport, school meals, supporting low-income families with food hampers, an increased allowance for foster carers and PPE.
The council has created an action plan to reduce the expected overspend, which it calls a “worst case scenario”. This includes holding monthly meetings to monitor spending, reducing the number of agency staff being used in the department, and reviewing all external contracts.
Amanda De Ryk, the 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 authority’s position for the remainder of the financial year.
Grainne Cuffe is the Local Democracy Reporter for Lewisham. The Local Democracy Reporter Service is a BBC-funded initiative to ensure councils are covered properly in local media.
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