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Budget cuts are unsustainable

  • By Gemma Kappala-R...

Reaction to the draft Local Government Finance Settlement for 2016/17

London’s boroughs are warning of tough decisions ahead as figures published in the local government finance settlement signal an average cut of nearly 30 per cent to council core funding over the next four years, on top of almost 50 per cent cuts since 2010. 

Unlike recent settlements, the budget cuts in London will not be evenly distributed, with a range from 20 per cent to over 45 per cent from now until 2020. 

Mayor Jules Pipe, Chair of London Councils, said: 

“London has taken a disproportionate share of the pain in helping to address the deficit and managed almost a 50 per cent reduction in core funding from government over five years while continuing to deliver, and even improve services. 

“This settlement confirms an additional 30 per cent cut up to the end of the decade, which is bad news for councils and communities across London. Some boroughs will face extraordinarily difficult decisions about how, and if, they provide certain services.” 

The government has offered a deal to confirm four-year figures for councils. London Councils has long called for greater certainty on funding and welcomes this approach in principle. However, councils will need more detail than is included in today’s announcement before they can sign up.

The local government finance settlement is the annual determination of funding to local government approved by the House of Commons. Councils will now have an opportunity to respond to the draft settlement before the final settlement figures are decided in parliament around the beginning of the year.