01 February 2008
London's councils are losing money to the provinces, its leaders claimed, as they demanded a fair funding settlement for the capital.
A cross-party coalition of more than 20 local authorities this week wrote to Prime Minister Gordon Brown highlighting how the latest local government finance settlement damages the ability of councils to provide good-quality services to London's communities.
A survey of political leaders and finance managers was unveiled at London's inaugural Finance Settlement Summit on January 31. It showed that 95% agreed that the settlement would have a negative impact on their council, with 89% agreeing that social services would face the greatest financial pressure.
Colin Barrow, deputy leader and Cabinet member for finance at Westminster City Council, said: 'The capital has the highest levels of unemployment, child poverty and housing overcrowding in the UK and needs more, not fewer, resources to address these issues.
'My colleagues in London local government say that they favour business rates being set and retained by local councils to plug this funding gap.'
Local government minister John Healey said it was up to town halls to deliver efficiency savings. 'It isn't just about how much money the government gives to councils, it is also about what they can do themselves to free up £1.5bn next year to improve services or cut council tax bills.'
The government plans to allow councils to generate extra finance by levying a supplementary business rate. But the Commons communities and local government select committee last week said the proposals would 'hobble' councils' attempts to make a significant contribution to their local economy.
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