A senior Lewisham councillor has hit back at suggestions the council risks bankrupting itself via “unrealistic” budgeting.

Cllr Jim Mallory was responding as chair of the public accounts select committee to a question submitted by a member of the public to a meeting of the council, held on January 22.

He defended the council’s budgeting and spending, and said he was disappointed the member of the public hadn't shown up as he was "looking forward to slaughtering" him when responding to any supplementary question.

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Cllr Mallory said he couldn't remember the chair of the PASC ever being asked a public question before

Rick Hebditch had submitted the public question ahead of the meeting, asking “how worried” the council was that in the words of a former cabinet member, ‘the council has spent £100,000s of tax payers’ money on the process of setting budgets that disintegrated on first contact with reality’”.

Mr Hebditch also asked if the council agreed “that Lewisham is going bust and the issuing of a Section 114 Notice, akin to the raising of the financial white flag to the government, is inevitable”.  

The quotes referred to came from  a blogpost in October 2019 by former cabinet member for resources and current member of the Public Accounts Select Committee (PASC), Councillor Paul Maslin, in which he criticised the council for going into its reserves for six years in a row and warned it could go bust.  

The New Cross councillor wrote that budget setting takes months, all 54 councillors and “many highly paid council officers”. 

“Why spend months and scarce resources in setting budgets for children’s social care and refuse collection […] which were clearly unrealistic and had to be supplemented by a raid on the reserves?  

“What’s more, why, if we have gone through this exercise in futility for six years in a row are we doing it again for a seventh year?  

“The definition of insanity is doing the same thing over and over again but expecting different results, at least according to Einstein. On this basis we are all clearly insane.” 

But in his response, cllr Mallory said Lewisham has “the ninth highest general and earmarked reserves by value for all 32 London boroughs” and said it “plans effectively and shepherds its resources prudently”.  

“As part of the council process of setting its budget, the role of public accounts committee is vital.  

“The council’s total annual budget includes spending plans for over £1.2 billion.  

“As such, the budget setting process is involved and detailed and one to which officers and members commit significant time and care.  

“This has always been and will necessarily remain the case. The budget process sets the priorities for spending public money on those most vulnerable and with the highest needs in our community.  

“Council tax payers funding is accounted for as part of the General Fund which for 2019/20 has a budget of £243m. This budget was set as the last in a decade of the most extreme austerity imposed by the government.  

“In this ten-year period Lewisham’s spending power was cut by 26 per cent while our population has grown by 10 per cent.  

“Having made £180m of cuts to date, the council has had to reduce its spending by £1 in every £3.  

“To make cuts of this scale, while protecting services as best we can, to meet the legal obligation to set balanced budgets each year has been very challenging.  

“For example, it has not been possible to identify all the necessary cuts on time. This has meant using reserves to support the budget in recent years, at an average of £3.5m per year.” 

He said that not all aspects of the budgets are delivered to plan, leading to some overspending, but that the CIPFA financial resilience index, “confirms that Lewisham finances are robust”. 

“Across seven measures of resilience the Council is rated as middle or lower risk on all seven. 

“Indeed, the public accounts committee has on several occasions scrutinised the extent of our reserves and the use to which we have put them and, from our work and questioning of officers and cabinet members, I am confident that the council will not ‘go bust’.  

“The council’s thorough and proper approach to budget setting means a Section 114 notice will not be required or even be likely at this time,” he said.  

Speaking at the council meeting on Wednesday (January 22), Cllr Mallory said: “I’m really disappointed Mr Hebditch isn’t here as I was looking forward to slaughtering him in the supplementary.”