The economy and public sector funding is expected to be constrained over the next five years as we recover from the pandemic and other factors. Most of our resources are allocated through the NHS and local government and our budget the assumptions we are making in the short-term are set out below.
Within the NHS, we will need to be realistic in our resource assumptions and combine the need to deliver improved effectiveness and outcomes through transformation and prevention. We will seek to prioritise those interventions that address inequality in outcomes. Our commitment to financial sustainability will be vital to ensure robust and effective delivery of our ambitions and responsibilities.
The Government is investing an additional £3.3 billion in the next two years to support the NHS, enabling actions that will improve hospital and community healthcare performance towards pre-pandemic levels. They will also make available up to £2.8 billion in 2023-2024 and £4.7 billion in 2024-2025 to help support adult social care and hospital discharge.
- Inflation – NHS South East London published funding growth is 5.32% in 2023/24 and 3.22% in 2024/25. This reduces to 2.64% in 2023/24 and 1.99% in 2024/25 after the application of required adjustments. Net inflation uplift of 1.8% applied across all budgets.
- Efficiency – We will be more rigorous in the tests we apply to both existing and additional investment with a specific focus on return on investment and benefits realisation. A minimum 4% efficiency savings will be required.
- Transformation – Additional funding received to implement transformation programmes in Mental Health, Health Inequalities and Virtual Wards. Our investment approach will result in a shift in total share of spend from hospital-based care towards community, mental health, primary care, and health inequalities & prevention.
- Integrated Care Board (ICB) running costs – Pay award/increase is unfunded and 30% real terms reduction on Running Cost required by 2025/26.
- Cost Pressures – Pressures will be monitored and mitigations developed on an ongoing basis to ensure expenditure is within the available resources.
| SouthEast London Integrated Care Board Budget – Lambeth | Total Budget £ |
|---|---|
| Hospital Services | 321,108 |
| Community Health Services | 84,070 |
| Mental Health Services | 106,124 |
| NHS Continuing Care Services | 31,652 |
| Prescribing | 38,288 |
| Other Primary Care Services | 2,977 |
| Primary Care Services Delegated from NHS England | 77,993 |
| Corporate Cost | 5,619 |
| Total | 667,831 |
The Lambeth Council Financial Strategy covers the four years from 2023-2027. The aim of the Financial Strategy is to have a balanced financial position with sufficient funding to support statutory duties and deliver manifesto commitments, recognising the funding uncertainties that exist.
In developing the Financial Strategy, the Council has estimated the amount of funding available over the planning period with the main sources of income being government funding, business rates and Council Tax receipts. There is greater uncertainty in the year 2025/26 onwards where national funding for social care reduces and increased costs may occur relating to social care reform.
The Council has also estimated expenditure over the planning period and included extra costs, for example for inflation for internal staffing and contracts. There is a high chance that actual expenditure increases will be higher than the estimates in the current environment, making planning difficult and it could be difficult to manage expenditure within budgets due to this.
The main driver of cost growth in social care in recent years has been increased acuity of clients coming into social care, increased numbers of clients from hospital discharges and price pressure from limited market capacity. Added to these, there are now increases in the costs that providers must pay to deliver services. Expected future costs are estimated from recent experience but there could be much larger cost increases.
The Council has responsibility to find ways to meet any funding shortfall so that it has a balanced budget and has sought to address this through income generation (changes to charges or new grants), procurement (opportunities through contracts) and transformation to deliver better value for money.
The Council has a balanced position in 2023/24 and will continue to identify further savings throughout the planning period.
2023/24 Council Revenue Budgets (compared to 2022/23)
| Directorate | 2022/23 Net Budget – £ | 2023/24 Net Budget – £ |
|---|---|---|
| Adults & Health | 96,391 | 107,414 |
| Children’s Services | 78,136 | 96,739 |
| No Recourse to Public Funds | 2,734 | 2,762 |
| Resident Services | 47,627 | 51,888 |
| Housing Services | 19,246 | 19,237 |
| Sustainable Growth & Opportunity | 2,868 | 3,345 |
| Finance & Investment | 13,903 | 10,444 |
| Chief Executive Office | 8,048 | 7,454 |
| Corporate Items | 81,255 | 81,743 |
| Total | 350,208 | 391,026 |
| Adults & Health budget breakdown | Budget £ |
|---|---|
| Adult Social Care: ADULTS WITH LEARNING DIFFICULTIES | 39,187 |
| Adult Social Care: ADULTS WITH MENTAL HEALTH NEEDS | 12,472 |
| Adult Social Care: ADULTS WITH PHYSICAL DISABILITIES | 11,501 |
| Adult Social Care: OLDER PEOPLE | 28,678 |
| Adult Social Care: SUPPORTED HOUSING | 868 |
| Adult Social Care: SUPPORTING PEOPLE | 4,696 |
| Adult Social Care Total | 105,815 |
| Public Health (100% Grant Funded) | 0 |
| Commissioning | 1,599 |
| Total | 107,414 |