Lewisham Council has announced an “unprecedented” overspend of £16.5m in 2017/18.

The council revealed the overspend in a cabinet meeting, with the figure brought down to £16.5m from £17.2m after the council dipped into a fund set aside for  ‘risks and other budget pressures’.

The overspend was largely due to pressures on children’s social care – with £15.6m overspent in 2017/18 – council papers explained.

This comes as the council estimates savings of around £35m will be needed by 2020/21.

“The level of overspend recorded at the close of the 2017/18 financial year is unprecedented for Lewisham,” council papers outlined.

“It would firmly suggest that these are budgetary pressures of an order not previously seen by the council and in particular with regards to children’s social care.”

Customer services was the second largest area of overspend, £5m over budget.

The residential care placements budget and the environment service were both overspent by £3.2m, according to documents.

Lewisham Council set its 2017/18 budget at £232.7m in February last year.

Their 2018/19 budget was set at £242.3m – £8.6m higher than the previous year – although the council has made a savings reduction of £4.8m to its budget, and the increase shows an extra £16.9m for “significant spending pressures” and £5m to make up for a one-off reserves use in 2017/18, according to council documents.

An amount of £8.5m is being taken from reserves to fund the budget, “but action is also being taken to ensure that expenditure is affordable in future years,” according to the documents.

“With a new set of challenges in terms of the delivery of revenue budget savings, the council will continue to apply sound financial controls in 2018/19.

“It is clear that the short and medium-term outlook will remain difficult and exceptionally challenging. However, as the local authority’s section 151 officer, the executive director for resources and regeneration will continue to work with directorate management teams across

the council to effect the necessary continued actions to manage their services,” the documents explained.

The council’s main sources of income comes from central government funding, business rates and council tax.