£500m shortfall leaves borough budgets on ‘knife edge’, October 2023

  • By Amy Leppänen

Our latest analysis of London local government finance pressures shows that boroughs in the capital face a funding shortfall of £400 million this year, rising to £500 million next year on current forecasts.

For context, £500 million is:

  • More than London boroughs spend on homelessness each year (£450 million in 2023-24).
  • Enough to deliver 33,000 apprenticeships to boost young Londoners’ skills and employment opportunities.
  • The cost of a year of care for 46,000 Londoners in nursing homes.

You may have seen BBC London coverage of this important issue and the potential impact on Londoners’ local services.  The level of savings required are enormous and unsustainable, with a growing risk of financial and service failures in the capital.

Ahead of the government’s Autumn Statement on 22 November, we are calling for urgent action to stabilise council finances.

Please see London Councils’ key priorities for the Autumn Statement, which include:

  • An overall funding increase of at least 9% (in line with what was received by London boroughs last year).
  • Investment to reduce London’s worsening homelessness crisis, including through uplifting the Local Housing Allowance and Homelessness Prevention Grant.
  • Reforms to the broken local government finance system, such as giving councils longer-term funding settlements and more devolved powers.
Amy Leppänen, Parliamentary Officer