London boroughs warn of £700m funding gap and “tough decisions” for local services

Boroughs in the capital need to make £700m of savings next year unless the government boosts funding for local services, London Councils has warned.

The cross-party group says savings on this scale will inevitably mean reductions to London’s local services. This in turn risks jeopardising efforts to drive economic growth and support residents struggling with the cost of living.

Although boroughs have worked hard to maintain spending on “vital” frontline services, this level of financial pressure means “extremely difficult decisions” will need to be made over future service provision.

London Councils highlights that underfunding of local services in the capital is a longstanding issue. Boroughs’ overall resources are 22 per cent lower in real terms compared to 2010, even though London’s population has grown by almost 800,000 (a 10 per cent increase).

The group reports that boroughs find themselves forced to consider options they have previously “avoided as much as possible”, including cutbacks to social care, bin collections, and homelessness services.

As the new government prepares to unveil its plans for the public finances, London Councils is therefore seeking protection for the local services that communities rely on and which make such a “crucial contribution” to economic and social wellbeing. It emphasises that any further reductions to council funding will lead to “even more painful” service cuts.

The group argues for a repeat of actions taken by the government at the height of the Covid-19 emergency, which saw ministers boost funding to help local authorities cope with the severe financial shock and ensure services could be sustained.

Cllr Georgia Gould, chair of London Councils, commented: “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 £700m funding gap next year will force us into the toughest of tough decisions unless the government offers new support.”

“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. Properly funding local services is essential for supporting struggling households and building economic growth in our communities.”

By Matthew Neville – Correspondent, Bdaily

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