London local government funding squeeze confirmed

  • By Gemma Kappala-R...

London Councils is ‘disappointed’ that despite growing demand for council services, London boroughs will still need to make millions of pounds of savings in 2019-20 to balance their budgets.

The final local government finance settlement for 2019-20, published today, confirmed that London boroughs will not receive enough additional funding to plug the £500 million funding gap boroughs are facing in the next financial year.

While £145 million for London local government will be useful, it is little more than a stopgap and underlines the need for the upcoming Spending Review to deliver a sustainable funding settlement for local government.

Cllr Peter John OBE, Chair of London Councils, said:

“We are disappointed that Government has not listened to our urgent concerns about the state of local government finances in London. London boroughs will have to make huge savings to remain in the black this year, putting pressure on key services that are already overstretched and struggling.

“We also have reservations about the way funding is being shared between different local authorities. While an additional £650 million for adults and children’s social care in 2019-20 is welcome, it is being distributed according to adult social care demand only. This will mean that overwhelmed children’s services departments across the country will not be able to access the funding they need, putting vulnerable children at risk.

“Today’s settlement is proof that a new vision for local government is sorely needed. We are committed to ensuring the upcoming Spending Review reflects local government’s central role in improving the lives of people up and down the country, resulting in more resources and further devolution to the sector.”

This year’s local government finance settlement is the last year of the four-year settlement agreed with MHCLG in 2016. Therefore the next Spending Review will need to set out plans for funding local government beyond 2020.

London Councils is urging Government to use the next Spending Review as an opportunity to work with local council leaders to put local government funding on a long-term sustainable footing, ensuring councils have the powers, resources and freedoms needed to continue empowering their communities and shaping local areas.

Read more about London Councils’ Investing in the Future campaign.