Lewisham Council will face “a huge price tag” if its children’s services fail their next Ofsted inspection, expected early 2019.

The service, which currently has an Ofsted rating of ‘good’, is reporting a £15.6m overspend.

This overspend was attributed to mistakes in financial forecasting and issues between council systems for HR and finance.

The overspend was broken down into demand for residential care places (£3.2m), fostering (£2.0m), placements in semi-independent  accommodation (£1.8m) and other placements, and a £7.5m overspend on staffing.

In a letter sent to the council from Ofsted, the independent regulatory service outlined where the council did well and what areas needed to be improved following a review in May.

This included criticism of staff’s ability to access information, and a slow rate of improvement to the multi-agency safeguarding hub – a council platform through which services can share information.

Quality of practice audits were also “underdeveloped,” according to the letter.

“This has a significant impact on the ability of staff to understand the experience of children and families in receipt of early help and child protection services and to measure service and to measure service effectiveness,” the letter explained.

Speaking at a public accounts select committee, executive director of children and young people Sara Williams said failing the inspection would be a “disaster.”

“As well as our financial woes, we are also faced with the prospect of a full Ofsted inspection. We are due for one, which is likely to be early in 2019.

“Failing such an inspection is not only a disaster for everybody at the service and the council – it also has a massive price tag attached.

“The focus is therefore on getting through that inspection and at the same time addressing our budgetary pressure. The two are not at odds with each other, but nothing in this area of work is a quick fix,” she said.

She said the council was focussing on improving IT systems which “underpin” the service – including the multi-agency safeguarding hub.

“We have also got a big focus on improving children’s social care practice,” she said.

Work was also being done to recruit foster carers, and re-establish permanent staffing needs, she said.

Lewisham Council had made “good progress” in working with children with complex needs, including those who go missing or are at risk of sexual exploitation and trafficking, according to the letter.

The letter also said “appropriate plans are in place” to address issues with systems in the service.