London boroughs face a funding gap of £700 million next year, says London Councils
(Picture: PA Archive)London’s borough councils will face a £700 million shortfall next year that would require the “toughest of tough” money-saving decisions — unless the Government increases funding for local services, cross-party group London Councils has warned.
It says the capital’s local authorities face making “colossal” savings that could see cuts to vital frontline services such as social care and bin collections, and would hit Londoners already struggling with the rising cost of living.
It added that authorities in the capital are currently up against their most challenging financial outlook since 2010.
The energy crisis, soaring inflation and a rising demand for services have put extra pressure on local authority budgets, opening a wide gap between the funding received and amount spent on local services.
Based on the Government’s current funding plans, London boroughs face a gap of up to £400 million this year and £700 million in 2023-24, London Councils’ analysis shows. In total, London’s local government is forecast to see a funding gap of £2.4 billion over the next four years.
The rising financial pressure is leading boroughs to consider options they have previously sought to avoid, such as cutbacks to social care, bin collections and homelessness services.
As Rishi Sunak’s new Government prepares to unveil its plans for public finances, London Councils is calling for a funding boost to help prevent such cuts.
London Councils chairwoman Georgia Gould said: “The funding outlook for boroughs is beyond bleak. The scale of the savings required is colossal and will inevitably mean cuts to the vital frontline services that so many Londoners rely on.
“Boroughs will do everything we can to protect our communities but a £700 million funding gap next year will force us into the toughest of tough decisions unless the Government offers new support.”
London Councils says local services in the capital have long been underfunded, with boroughs’ overall resources 22 per cent lower in real terms compared to 2010, while London’s population has grown by about 10 per cent.
The group is now calling on the Government to repeat its action from the height of the Covid-19 pandemic, when ministers increased funding to help local authorities cope with the financial shock and ensure services could continue.
“Just as ministers worked effectively with councils at the height of the Covid-19 pandemic, we need a similar spirit of partnership in the face of the cost-of-living emergency,” said Ms Gould. “Properly funding local services is essential for supporting struggling households and building economic growth in our communities.
“We’re urging the Government to listen to councils’ concerns and take swift action to avoid a bad situation becoming even worse.”
A Government spokesman said: “We recognise councils may be concerned about their budgets and are working very closely with them to understand the impact [of] inflation.
“This year, we have made an additional £3.7 billion available to councils in England, including an extra £685 million in London.
“Through the Energy Bill Relief Scheme, we are also providing a discount for councils dealing with rising energy costs this winter.”
