- Best Local Government Finance Settlement in a decade still leaves London boroughs with a £200 million funding shortfall next year
- Essential that Spending Review 2020 provides a long-term, sustainable funding settlement for local government
- Boroughs facing rising costs, increasing demand from residents and shrinking resources
London Councils is calling on MHCLG and the Treasury to build on the most positive Local Government Finance Settlement in a decade by tackling long-term funding issues that are holding London boroughs back.
Responding to a consultation on the provisional 2020/21 Local Government Finance Settlement, London Councils welcomed the much-needed increase in funding to the sector but highlighted that despite this London boroughs will still face a £200 million funding shortfall next year.
London boroughs are dealing with rising costs, increased demand from residents and shrinking resources. Children’s services, adult social care and homelessness support are under the most pressure, but all council services have felt the impact of budget reductions over the past 10 years.
London Councils is urging Government to deliver a long-term, sustainable funding settlement for local government in Spending Review 2020, due later this year. This will involve getting to grips with key questions about how local government should be funded - such as how to reform Council Tax and Business Rates and what role fiscal devolution could play.
Uncertainty over funding for local government post-2021 remains a key concern for London Councils. The outcome of the Fair Funding Review, 75% Business Rates Retention proposals and Spending Review 2020 will have a seismic impact on the sector, but details remain unclear.
Cllr Peter John OBE, Chair of London Councils, said:
“It is telling that the most positive Settlement in a decade still leaves London boroughs grappling with a £200 million funding shortfall and a highly centralised system.
“This year presents Government and councils with an unmissable opportunity to sort out local government finance. We need a sustainable, long term funding settlement that empowers councils to play an active role in addressing the challenges our communities face. This will involve scrutiny of how councils are funded right now and proposals for doing things differently.
“We look forward to working with MHCLG and Treasury on the Fair Funding Review, Business Rates Retention and Spending Review 2020 to ensure London boroughs have the resources, powers and freedoms they need to deal with the growing demand for local services in the capital.”