The authority says the saving won’t be enough to provide key services, and £45.9 million is needed next year alone.
One service that is proving financially challenging is homelessness.
Bosses say the number of homeless households have increased by 50% in the last two years to 4,600.
The cost of housing homeless households in overnight accommodation is expected to reach £100 million this year.
This means that the council has spent £30 million more than it budgeted for.
Cllr Claire Holland, the Leader of Lambeth Council, said: “The cost of providing the vital public services that the most vulnerable in our communities rely on has spiraled, leaving us in an unsustainable financial position following years of chronic underfunding from central government.
“Following years of structural underfunding and a refusal of successive governments to stabilise local authority finances and deliver much needed reform, we are facing an acute situation. We have picked the low hanging fruit. Councils across London are now at breaking point.
“Our ability to cope with the situation has been worn down by fourteen years of austerity policies and a succession of government failures and delays in delivering much needed reforms. That includes failures to address the promised reforms to adult social, a failure to build the housing this country so desperately needs and a failure to properly fund front-line services our residents depend on.
“This is now the worst funding crisis this council, and others across the country, have ever faced. We need to be open with residents that saving this amount isn’t possible without having an impact on the services people rely on.
“Where possible, we have focused on finding savings through being more efficient, putting forward income generating proposals, and increasing our fees and charges in a way that’s fair within the current challenging financial situation.”
