London councils call for spending review delay

Councils make alternative case for one-year settlement amid “unprecedented” political uncertainty.



London councils are going up against the government to get any spending review delayed until present “political turbulence” settles.

A group of 12 London councils says that, given “unprecedented” circumstances, a one-year settlement should be published instead.

Central London Forward (CLF) – made up of Camden, the City of London, Hackney, Islington, Haringey, Kensington and Chelsea, Lambeth, Lewisham, Southwark, Tower Hamlets, Wandsworth, and Westminster – also recommends a one-year delay to the fair funding review due to be piloted later this year.

“We are calling on government to delay the fair funding review and use that time to work with us and local authorities across the country to create a truly fair and sustainable funding system for local government,” said CLF chair Richard Watts.

CLF noted that the fair funding review is likely to cost London councils worst, with eight placing in the top 10 to lose the most.

Westminster city council would be the biggest loser, with a 54% reduction in its finances.

Council leader Nickie Aiken said: “We are living through an era of unprecedented turbulence in politics – the public, businesses, everybody is waiting to see how this process will play out.

“Nobody knows, and it is paralysing the country.

“This is not the time to introduce such fundamental changes to local authority funding, as that would be adding unacceptable levels of uncertainty.”

In May this year, think-tank analysis exposed London council budgets as having fallen by 17% over the past eight years – with planning and development, highways and transport, and cultural activity budgets being the hardest hit.

A report from Centre for London found that, taking population growth into account, councils in the capital have seen an overall 17% fall in their budgeted services expenditure per head from £879 in 2010-11 to £729 in 2018-19.

Inner London boroughs bore the brunt: Westminster was worst (-32% cut), followed by Newham (-30%), Tower Hamlets (-29%), Hackney (-28%), Camden (-25%), and Wandsworth (-25%).

Only two boroughs saw their budgets increase over the past eight years – Kensington and Chelsea (+10%) and Barnet (+1%), the analysis found.

Cuts to planning and development budgets have fallen by 59% since 2010-11 across the capital, despite housing delivery targets almost doubling from 25,000 to 43,000 units in 2015-16.

Over the past year, councils have started to see an upturn in their budgeted expenditure per head across Greater London, which rose 2% from an average of £713 to £729.

Analysts indicate this rise is the result of additional government funding and council tax for social services coming through.