A £12.6m overspend in Lewisham’s children’s social care services was caused by poor record keeping by managers, an internal audit has found.
Inadequate communication between central, children and young people finance sections was also blamed in the report to the council’s public accounts committee.
However, one leading councillor has suggested the explanation was only part of the story and that officials were reluctant to reveal exactly what went wrong. Councillor Jim Mallory, a member of the Overview and Scrutiny Board, said: “I have to say that we weren’t totally satisfied with the explanations of inadequate reporting between central and CYP finance sections. The senate seems to be reluctant to admit to precisely what went wrong.”
According to the audit, the overspend was made worse due to delays in releasing the council’s budget report for the 2017/18 year, which was not released until May last year despite being due in January. By May, children’s social services were already overspending and cutting into the next financial year.
Lewisham Council has said it needs to make cuts of £30m in the next two years to 2020/21; there must be £17m cut in 2019/2020 and £13m the next year. The overspend on children’s social care services made up over half of the money that must be cut over the next year.
Mallory added: “Managers were taking decisions that involved extra expenditure. In our view it was insufficient to say that because the systems weren’t reporting properly that therefore there wasn’t anything to do.
”Any senior manager, I hope we would expect would know that if they were taking decisions that cost extra money they would be more sensitive than simply waiting for the financial figures to come through that they were overspending. And that we found difficult to accept.”
Mallory continued: “We cannot unreservedly keep looking at our reserves as a solution to the crisis. Our endorsement should not be seen however as supporting the continued use of the reserves, it does constitute on your part a massive leap in faith that somehow we’re going to get it right next year.”
A council spokesperson said the overspend reflected its ”absolute commitment” to ensure children in need were properly supported and protected, in the face of higher costs for children’s home places and rising numbers of children in care nationally.
The spokesman said that an improvement plan was being overseen by a board chaired by the lead member for Children’s Services and the Executive Director for Children and Young People.
”These financial challenges are part of the wider austerity challenges the Council is managing, having had to make £165m of cuts to our annual spending since 2010 and needing to make a further £30m by 2020.”