The increase in funding for local government announced in yesterday’s budget was described by Paul Johnson of the Institute for Fiscal Studies as “a big change in direction” that “will be welcome in town halls” but added that it will nonetheless “still leave spending lower than in 2010” and the Office for Budget Responsibility has said it expects Council Tax rises to continue. Unsurprisingly, then, London Councils, the umbrella body for the capital’s 33 local authorities, has yet to enrol in Rishi Sunak’s “age of optimism”.
London’s boroughs are dealing with having to make the largest cuts per resident in the country – £39.27 per person compared with a UK average of £30, according to BBC research in July – and London Councils are unhappy about Sunak’s spending review’s “lack of compensation” for local tax losses arising from the pandemic, which they say adds up to £400 million to be dealt with over the next two years.
They are unhappy, too, about “continuing uncertainty” over adult social care funding, saying they need the same figure, £400 million to meet the needs of 150,000 Londoners, with demand rising fast. London Councils chair Georgia Gould welcomed “some recognition” of the role of local services, but said the funding increase won’t be enough to meet “the huge challenges facing our communities”, noting particularly the adult social care issue, which is the largest area of council spending.
Gould added that “we’re also deeply concerned that London is missing out on a fair share of levelling up support”. The capital received a total of £65 million of the first £1.7 billion of the government’s £4.8 billion levelling up fund, which has been criticised for a prospectus that favoured Tory seats in the north of England and all but excluded London. The capital’s small share will go towards projects in Brent, Ealing, Newham, Tower Hamlets and Wandsworth.
A Treasury factsheet accompanying the spending review shows that £232 million of levelling up fund money has been provided for the North West, £203 million for the East Midlands, £196 million for the West Midlands, £187 million for Yorkshire and the Humber, £151 million for the South East, £131 million for the South West, £100 million for the North East and £87 million for the East of England. Scotland and Wales got more too. Only Northern Ireland, given £49 million, has received a smaller sum than London.
London Councils has underlined that London has the highest rates of poverty in the UK and the highest unemployment rate, with one in five young people currently without jobs, while nearly one million Londoners, including many in work, are claiming Universal Credit. Optimism is in short supply.
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