London Councils has set out our priorities ahead of the Spring Budget on Wednesday 6 March. You can read our full representation to the Treasury at this link.
We would be grateful for any support London MPs can give to our asks of the Chancellor over the next few weeks, in particular the extension of the Household Support Fund, which will have been a vital lifeline for many of your constituents over the last few years.
The financial challenge facing London local government remains immense. Boroughs’ resources remain 15% lower than 2010-11 in real terms, despite there being almost 800,000 more Londoners.
Our analysis shows that the 2024-25 Local Government Finance Settlement will leave boroughs with a shortfall of over £400 million over the next year, broadly equivalent to annual homelessness spending.
Outer London boroughs – as some of the lowest funded per capita in the country – face the most acute challenges to balance their budgets. But as the Institute for Fiscal Studies found, the whole of London local government is struggling with a 17% gap between funding and need: by far the largest of any region in England.
We recognise all of the issues facing London local government cannot be solved in one fiscal event. However, our recommendations focus on the immediate actions the Chancellor can take to help stabilise local public services, protect the most vulnerable from the cost-of-living crisis, and stimulate economic growth.
Our priorities
We’re asking the government to:
- Extend the Household Support Fund (HSF) in 2024-25 at existing levels. The HSF is worth £137 million to London boroughs, who have used it to provide essential support funds for residents struggling to pay their bills and invest in local advice services and food hubs. If funding cannot be provided at the same level, at a minimum, there should be a multi-year transitional phase to help local authorities plan and meet the needs of their residents.
- Remove the January 2011 cap on Local Housing Allowance payable for temporary accommodation in Housing Benefit subsidy. This would enable local authorities to be fully reimbursed for the spiralling costs of those temporary accommodation on housing benefit.
- Provide new funding for delivering wraparound support for newly recognised refugees. London boroughs are disproportionately affected by the record number of homelessness presentations from people leaving Home Office accommodation, but there has been no funding for local authorities to house asylum seekers in hotels since April 2023.
- Provide additional funding for council Housing Revenue Accounts to support an improvement in standards throughout 2024-25 and address the critical challenge of damp and mould as a new regulatory system is introduced.
- Increase adult social care market sustainability funding to reflect inflationary pressures and increase discharge funding to ensure patients receive reablement support to become physically fit, regain their independence and return to their ordinary residence.
- Deliver a single, fully devolved employment and skills fund to reduce London’s huge skills shortages. Existing funding could be spent more effectively if combined into a single fund managed exclusively by London government.
- Reintroduce the VAT Retail Export Scheme for foreign visitors to make London and other UK destinations more competitive for overseas shoppers.
- Establish a partnership with local government through 3Ci, the Cities Commission on Climate Investment to catalyse private investment into local net zero programmes and pilot neighbourhood level approaches to decarbonisation.
- Commit to offering deeper devolution to London government. London’s devolution settlement is over 20 years old and must be updated and reformed to allow the boroughs and Mayor to work together to tackle the 21st century problems facing the capital.
More information on London boroughs’ finance pressures and policy priorities can be found at this link.
