London councils ‘running out of funding options’

9 May 18

London boroughs are “running out of road” to plug funding gaps in planning, culture and transport budgets especially, a think-tank has said.

Analysing government figures, the Centre for London think-tank found that the decline in local authority spending between 2010-11 and 2017-18 amounted to 19% per head.

In particular, London’s inner boroughs were hit hardest. Newham’s budget spending fell by 33%, Westminster and Camden’s reduced by 29%, whereas Sutton experienced a drop of only 0.4%.

The report said that, as a result of austerity, local authorities focused resources on statutory services and social services in particular.

Overall, statutory services saw funding cuts of only 2.8% with social services seeing reductions of 10.6%.

This compared to much steeper cuts in other areas like planning, culture and transport, where spending decreased by 55%, 41% and 38% respectively.

Richard Brown, research director at CFL said: “Newly elected London councillors are this week arriving at town halls that have been on the front line of austerity. 

“London boroughs, like other metropolitan authorities, have been hard hit by spending cuts, with the result that delivering on manifesto promises – especially on increasing the supply of affordable housing – may be challenging. 

“Until now, councils have shown ingenuity in finding efficiencies and protecting statutory services, but they are running out of road.

“Continuing austerity is likely to force some harsh choices in the years to come.”

He urged London boroughs to collectively lobby for fiscal devolution and local taxation reform.

The report also included analysis of government figures on homelessness, which showed that cuts are affecting vulnerable Londoners disproportionately. In total, 1,600 households are classified as homeless and in priority need – a 70% increase on the previous years figures.

See our in depth report here on councils reserves, revealing London councils are starting to dip into rainy day savings

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