London mayor unlikely to make savings targets, says Assembly
By Mark Smulian | 18 October 2011
London Assembly members have cast doubt on
whether the capital’s mayor can meet his target for savings from shared services.
Report 2011 says Boris Johnson’s ‘target and timeline for [these] savings
Assembly members are powerless to amend the
budget unless they can muster a two-thirds majority against any of its
provisions, a rare occurrence. However, their report, published today by the budget
and performance committee, is used to flag up issues ahead of the proposed
budget’s publication in December.
The report says shared services arrangements
worth only £1.2m had been implemented since 2006, ‘less than 0.5% of the £300m
a year now hoped for’.
Police, fire and transport budgets had failed to
disaggregate shared services savings from those of other kinds, causing
‘difficulty [in] assessing progress towards the mayor’s shared services target’.
The committee is also sceptical about the
mayor’s ability to use additional borrowing to meet budget gaps caused by
reduced government grants.
It says he has proposed borrowing £110m over
three years, a sum that would exhaust current borrowing capabilities and leave
an annual cost of £10m for interest and loan repayments, whose affordability
Concerns are also raised about unexpected costs
arising from next year’s Olympic Games, including those from the stadium
remaining in public ownership, and the £190m bill for the police arising from
the August riots.
Committee chair John Biggs said: ‘It is becoming
increasingly challenging for the mayor to protect services that millions of
people in the capital rely on every day. This looks set to be his toughest
The mayor’s budget is made up of four parts –
the Greater London Authority’s own activities, the Metropolitan Police, the
London Fire and Emergency Planning Authority and Transport for London.
In 2011/12, the police budget was £3.5bn, of
which £2.5bn came from government grants, which are expected to reduce by 7% in
2012/13, the report says.
The LFEPA has a £453m budget, of which £252m
came from the government. This is due to rise slightly by 0.2% in 2012/13 but
it is not known whether it will face heavy cuts after that to bring it into
line with the 25% real terms cut imposed on English fire and rescue authorities
in the four years to 2014/15.
TfL has a £9.2bn budget, £3.3bn of which comes
from government grants, which will fall by 21% in real terms over the four
years to 2014/15.
The GLA budget of £136.3m includes £44.7m of
government grant, expected to fall by 1.7% next year.
It will take on housing and economic development
responsibilities next year from the Homes and Communities Agency and the defunct
London Development Agency, together costing some £700m. Government funding for
this transferred work is yet to be confirmed.