£50 million in exceptional financial support for the London borough

The Government has agreed in principle exceptional financial support for Lambeth LBC of up to £50m for 2023-24 and 2024-25.

The London borough joined the list of 19 local authorities that have been given in-principle support allowing them to use capital proceeds from asset sales or borrowing to fund day-to-day costs up to this amount.

In a letter to Lambeth’s interim corporate director of finance Duncan Whitfield, published this morning, the Department for Leveling, Housing and Communities confirmed that the authority’s request for up to £30m towards capitalization had been approved for 2023-24.

Because of this approval, any loan from the Public Works Loan Board will be subject to an additional percentage premium on the interest rate, unless it is for the Housing Income Account.

Susan Clarke, writing on behalf of the DLUHC, added that a “condition” of this agreement is that in the next month Lambeth “develops and shares” an action plan “that addresses key recommendations” from the Chartered Institute of Public Finance & Accountancy (Cipfa). ) insurance review.

That review, also published today, says Cipfa is “reasonably assured” that Lambeth’s financial plans are “closely monitored” and have taken “reasonable steps to minimize the need for government support”.

The report added: “It (Lambeth LBC) is under significant pressure from historical events, which the council is addressing with a consistent and well-managed approach.

“There is no indication that the capitalization request is intended to alleviate any other financial pressures facing the council.”

Lambeth told the LGC that the exceptional financial support is linked to the costs associated with a Historical Child Abuse Compensation Scheme, which pays compensation to people who have been abused or lived in fear of being abused while in care.

A spokesperson for Lambeth BC said: “Lambeth Council has sought additional funding from government in 2022 to continue funding the Lambeth Children’s Home Repair Scheme, which has provided compensation to thousands of survivors of historical child sexual abuse.

“The scheme was established in 2018 and due to the increased number of people coming to access the scheme, the council applied to the government to extend its initial funding direction, which allowed the council to borrow to fund the cost of the scheme (now estimated to cost between £155 and £172 million).

“As part of the expansion, a review of the council’s financial position was undertaken by the Chartered Institute of Public Finance and Accountancy and found that the council is managing its financial position effectively.”

Cipfa recommends that Lambeth “reinforce the need to meet its savings programme”, focus specifically on the “potential impact” of changes to senior officer roles, review the “affordability” of its capital programs and “consider” using data to compare with neighboring neighborhoods.

Editor’s note: This story has been updated after original publication with comments from Lambeth LBC.