Ahead of the Autumn Budget, London Councils is renewing calls for essential local services to be properly funded to pave the way for long-term reform of council finances.
London’s population will swell to 9.1 million by 2020, having grown at twice the rate of the rest of England. This will drive an increase in demand for a range of council services, particularly housing, adult social care and children’s services.
Yet by 2020 London boroughs will have experienced a 63% funding reduction since 2010.
London Councils’ research shows that there will be a cumulative £1.6 billion funding shortfall in borough finances by the end of the decade unless the cost of meeting the needs of Londoners is recognised by the Treasury.
As well as addressing this funding gap to alleviate immediate funding pressures, London Councils would also welcome plans to empower local leaders to provide truly sustainable public services.
Cllr Claire Kober OBE, Chair of London Councils, said:
“London already has a population roughly equal to that of Scotland and Wales combined and is growing at twice the rate of the rest of the country. Properly funded council services that are alive to the changing needs of local residents and businesses are vital to ensuring that London can continue to maintain its position as a leading global city.
“We hope that Government will use the Autumn Budget to put London boroughs on a more sustainable financial footing so that they can continue to provide high quality services. We are also keen to see commitments to working with us on reform of the wider local government finance system. Securing financial autonomy for local areas through devolution must be at the heart of these discussions and plans.”
Notes to Editors:
London Councils’ key concerns ahead of the Autumn Budget:
London has experienced significant funding cuts
• The 2017-18 local government finance settlement confirmed cuts to core funding of 26% in real terms over 3 years. This comes on top of a cumulative cut to core funding of over 50% in real terms since 2010-11, meaning core funding from central government to councils will have fallen by 63% in real terms over the decade to 2019-20.
• London boroughs face a total funding shortfall of at least £1.6 billion per year by 2020.
Adult social care is in crisis
• Despite additional funding provided by Government, London Councils estimates that between now and 2020 the estimated cumulative funding gap in adult social care in London is between £300-400 million.
• The cost per home care placement in the capital is set to increase by an average of 7.5% and the cost of home care provision for over-65s by an average of 3.1% over the year to 2017-18.
Housing services are in crisis
• London has more than 50,000 households in temporary accommodation, three-quarters of the national total, and we estimate that London boroughs are already spending an additional £170 million to meet the existing shortfall.
• The Homelessness Reduction Act will come into force in April 2018. It will require boroughs to provide more services to more people. We estimate that this will cost £77 million per year in London alone and could rise to £132.7 million. The government has only allocated £72.7 million over the course of the Spending Review for implementation of the Act across the whole of England. Note: An additional £11.7 million in new burdens funding was announced on 16 October. This increased the total amount of new burdens funding from the £61 million cited in our September submission, to the £72.7 million mentioned above.
• London boroughs are actively responding to the Grenfell Tower fire by reviewing the fire safety of accommodation they own. Early estimates based on information from the 21 boroughs that have responded to date suggests that the combined total cost of remedial work has already reached approximately £402 million. Note: This figure has risen since London Councils’ original Budget submission due to receipt of additional information from boroughs. It is likely to rise as further estimates are received.
• According to the Department for Communities and Local Government’s new methodology for calculating local housing need, London will require 72,000 new homes a year to keep pace with demand from residents. Extensive planning will be required to plan for and deliver these new homes and associated infrastructure.
Children’s services will be in crisis soon
• Children’s services funding is an urgent priority for London and will only continue to rise up the national agenda as demand pressures grow.
• Between 2013/14 and 2016/17, the number of pupils with Education, Health and Care (EHC) plans in London increased by 10%. Having such a plan is an indicator that a child has special educational needs.
• Council spending on these pupils in 2016/17 was greater than the amount allocated by Government in 26 out of 31 boroughs, with a combined funding shortfall among overspending boroughs of £100 million.
• A recent survey of boroughs found that 27 out of 30 boroughs reported overspending in children’s social care budgets in 2016/17, averaging £3.5 million per borough.