London Councils criticises ‘wholly inadequate’ government funding proposals

by Dave Hill

The government’s proposals for funding London’s boroughs next year have been slammed as “wholly inadequate” by the body representing the city’s 33 local authorities.

Though welcoming what it called a “limited recognition” of the need to invest more in local services across the capital, London Councils damned the newly-published provisional local government finance settlement for 2018/19 as providing “no new support”, as boroughs prepare to make cuts totalling more than £540m.

Communities secretary Sajid Javid announced on Tuesday that he was raising the amount by which England’s largest local authorities can increase council tax bills without having to hold a referendum to secure residents’ support for it from 2% to 3%.

But London Councils dismissed this change as “wholly inadequate compared to the scale of the challenge facing London boroughs”, saying that it could raise no more than £30m in all.

The organisation’s chair Claire Kober, who is also the leader of Haringey Council, said: “Tinkering with the council tax referendum limit” would “go nowhere near” plugging an all-boroughs funding gap projected to reach £1.6b by 2020.

London Councils says that between 2010, when the Conservative-Liberal Democrat coalition national government was formed, and 2020, core funding for the boroughs will have been cut by 63% during a period in which London’s population will have grown by 13%. The biggest burden of cuts has fallen on some of the poorest boroughs.

Kober added: “We need a fundamental change in councils’ ability to raise resources to meet local needs. Housing, children’s services and adult social care are reaching breaking point.”

Lord Porter, chairman of the national Local Government Association, responded to Javid’s provisional settlement by calling for referendums on  council tax rises above the limit to be abolished “so councils and their communities can decide how under pressure local services are paid for, with residents able to democratically hold their council to account through the ballot box”.

In November, London Mayor Sadiq Khan and the boroughs welcomed an agreement that will allow London government to retain a larger share of business rates raised in the capital, calculated as likely to amount to £240m next year. They would like eventually to retain the full amount raised, rather than seeing more than half of it redistributed around the country and also to have the power to set rates locally.

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