The cross-party London Councils group has responded to the government’s Spring Statement.
Cllr Claire Holland, Chair of London Councils, said:
“The government is right to prioritise boosting economic growth. Whether it’s building new homes, supporting people into work or attracting investment into our local areas, councils have a critical role to play in this mission. However, the crisis in town hall finances is holding us back.
“It’s vital the upcoming Spending Review and planned reform of council funding deliver the investment and financial sustainability boroughs need to drive growth in the capital and across the country. Without this, we risk more and more boroughs entering effective bankruptcy – a situation which would undermine economic confidence, hold back growth, and cost the public purse more in the long run.
“Given the tough fiscal outlook, we must continue to focus on investing in prevention and reform of public services so we can deliver better value for money and better outcomes for our communities. Boroughs are committed to this agenda, but we need funding which enables us to make these long-term changes, as well as dealing with the current pressures which have built up over the last 15 years.”
London Councils is urging the government to use the Spending Review to deliver much-needed investment in local services after more than a decade of structural underfunding and instability – both to provide a sufficient level of funding for existing services, but also to invest in preventative measures to help reduce future need.
Boroughs share the government’s housebuilding ambitions, as building new homes and improving housing affordability is key to tackling London’s worsening homelessness crisis. There are around 300,000 potential new homes with planning permission granted by London boroughs that have not yet been built. Factors holding back delivery include fast-rising construction costs in recent years and insufficient funding for vital local infrastructure and affordable housing.
Among London Councils’ Spending Review asks is a call for overall council funding to be restored to 2010 levels by 2028-29, requiring real-terms increases of 4% every year. The cross-party group’s priorities also include protection of funding for demand-led services to meet forecast levels of growth, access to a broader range of funding sources, and investment in the early intervention and prevention services that bring the most benefits over the long term.
Boroughs in the capital receive around 28% less funding per Londoner compared to 2010. With skyrocketing demand for services – especially homelessness support and social care – and ever-increasing costs, London Councils says boroughs will be left grappling with a funding shortfall of at least £500m in the coming year (2025-26).
London Councils’ Spending Review representation to the government can be found here.