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Council tax increase ‘wholly inadequate’ response to London’s needs

  • By Gemma Kappala-R...

London Councils, which represents the 32 London boroughs and the City of London, welcomes Government’s limited recognition of the need for greater investment in local services across the capital.

However, today’s Local Government Finance Settlement provides no new support from Government. The power to raise council tax by a further 1 per cent is wholly inadequate compared to the scale of the challenge facing London boroughs.

Councils across the capital need to make cuts of more than £540 million next year. A 1 per cent increase in council tax would raise little more than £30 million.

Overall, between 2010 and 2020, Government will have cut core funding for London boroughs by 63 per cent. At the same time, London’s population will have grown by 13 per cent, more than twice as fast as the rest of the country. As a result, London boroughs need to find £1.6 billion of savings by the end of the decade to balance their books.

Cllr Claire Kober OBE, Chair of London Councils, said:

“Tinkering with the Council Tax referendum limit is not an adequate response to the wide-ranging challenges facing London boroughs. Even if all boroughs implemented an additional 1 per cent increase, the extra money raised would go nowhere near plugging our £1.6 billion funding gap by 2020.

“We need a fundamental change in councils’ ability to raise resources to meet local needs. Housing, children’s services and adult social care are reaching breaking point. This is a missed opportunity to deliver long-term solutions that put vital council services on a more sustainable footing.”

ENDS

Notes to editors

The Local Government Finance Settlement is the annual determination of funding to local government. It needs to be approved by the House of Commons following a consultation period of four weeks. London Councils will be responding in full to the consultation.