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Cost shunts and unfunded burdens

Since 2010 London boroughs have been asked to deliver more services

Government has transferred responsibilities without sufficient funding and has failed to recognise existing unfunded burdens.

For example, responsibility for Council Tax Support transferred to local government in 2013/14 with a 10 per cent cut in funding. Since then, government funding has been cut by a further 36 per cent. Councils in London have had to find an additional £220 million to ensure spending has only been cut by 17 per cent. Despite this, 35,000 fewer pensioners and 159,000 working age adults received Council Tax Support in 2017/18 than in 2013/14.

Public Health was transferred to local government in 2013/14. Since then, like for like funding has been cut by more than 5 per cent. Over the same period, NHS funding has risen by almost 20 per cent. Had Public Health Grant increased in line with the NHS budget, London boroughs could expect to receive around £190 million more in 2019/20.

2 adults and a child - family

Hidden costs, revealed

The impact of cost shunts and unfunded new burdens on London local government by area.

  • Temporary Accomodation
    Underfunding of homelessness and temporary accommodation (creating a cost shunt to boroughs’ general funds of over £170 million per annum)

  • Homelessness Act
    The Homelessness Reduction Act 2017 – the cost of which is estimated at around £80 million per annum in London while only £14 million of new burdens funding was awarded to London boroughs.

  • No Recourse to Public Funds Families
    Unfunded costs of supporting people with No Recourse to Public Funds (NRPF), estimated to be in excess of £50 million per annum across London.

  • Unaccompanied Asylum Seeking Children
    Costs of supporting Unaccompanied Asylum Seeking Children up to the age of 25 – creating a further gap of around £18 million per annum.

  • National Living Wage
    Additional costs resulting fromm the National Living Wage - the financial impact for London local government could be in the region of £170 million per annum by 2019/20.

  • Increased national insurance contributions
    Increasing national insurance contributions from 2016/17 - estimated to have increased NICS costs for London boroughs by between £50 million and £100 million a year.

  • Deprivation of Liberty Safeguards
    Deprivation of Liberty Safeguards is costing at least an additional £10 million a year across London.

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