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London local government funding gap expected to rise to £2bn by 2020

  • By Rosemary.Davenp...

London boroughs look set to face a huge £2bn funding gap by 2020 as a result of continuing cuts to local government funding.

As part of its submission ahead of this year’s Autumn Statement, London Councils, which represents all 32 boroughs and the City of London, has warned current funding levels are unsustainable and that boroughs in the capital face the biggest reduction in “core spending power” of all regions.

Some boroughs are already spending more than 70% of their budgets on social care, and larger than average population growth across all age groups is set to place noticeably bigger demands on them to deliver children’s services and school places, as well as health and social care for the elderly and those with physical and learning disabilities.

Cllr Claire Kober OBE, Chair of London Councils, said: “The current four-year funding settlement for London does not take into account large levels of population growth – meaning it’s even tougher on boroughs than it first appears.

“Even with the assumption that all boroughs will raise council tax, which is unlikely, the scale of these funding cuts coupled with inflation and a rise in demand for services means London will be facing a funding gap of £2bn in 2020.

“Local government must be given the tools to meet rising demand for services and it is vital that stable and sustainable funding models are put in place to allow our city to grow enough to meet these demands.  We hope to see something which will reflect this in the Autumn Statement.

“With boroughs already spending huge chunks of their budget on social care, it is clear many will be unable to continue to provide the public services they currently offer.

“Government has a responsibility to ensure local councils are not left to deal with these huge rising pressures alone with funding settlements which simply don’t add up.”

Ends

Read London Councils' full Autumn Statement submission to Government here (PDF)

Notes to Editors

  1. London Councils represents London’s 32 borough councils and the City of London. It is a cross-party organisation that works on behalf of all of its member authorities regardless of political persuasion.