The Government has agreed in principle up to £50m of exceptional financial support for the London Borough of Lambeth.
The council joins 19 other local authorities that have agreed in principle capitalisation directions.
The extra financial support is for 2023-24 and 2024-25.
The council’s financial difficulties are in part related to costs associated with a redress scheme for historic child abuse cases.
A Lambeth Council spokesperson said: 'Lambeth Council sought additional capitalisation from the Government in 2022 to continue to fund the Lambeth Children Homes Redress Scheme which has provided compensation to thousands of survivors of historical child sexual abuse.
'The scheme was established in 2018 and due to increased numbers of people coming forward to access the scheme, the council applied to the Government to extend its original capitalisation direction which allowed the council to borrow to fund the cost of the scheme (now estimated to cost between £155m and £172m).
'As part of the extension, a review of the council’s financial position was undertaken by the Chartered Institute of Public Finance and Accountancy [CIPFA] and found that the council is effectively managing its financial position.'
A report by CIPFA found Lambeth LBC had ‘robust arrangements and processes to ensure sound financial and risk management and sustainability.’
However, it recommended the council ‘reinforces the need to deliver on its savings programme and continues to hold directors and lead members to account for delivery.’
