Chancellor Philip Hammond’s autumn budget has “done little” to help put London’s boroughs in a secure financial position and provide services to match the “capabilities and ambition” of a city that generates huge tax revenues for the whole of the UK, according to the chair of the cross-party body that represents the capital’s 33 local authorities.
Peter John, who is also leader of Southwark Council, said that “cash injections and other short term measures” for local government announced by Hammond yesterday do not “match the scale of the challenges facing London’s local services,” and that the effect of core funding reductions “totalling £4 billion” since 2010 coupled with a lack of “devolved powers and freedoms” enjoyed by other global cities are putting “unprecedented pressure” on children’s services, adult social care and housing, with “knock on effects” on policing, the health service and schools.
The budget included additional money nationally for adult and children’s social care, mental health services and schools, along with business rate relief for small businesses and the transition to Universal Credit, which has had a troubled early roll out in some London boroughs. Each of these measures might provide some help to London, but John maintains they are nothing like enough to support a city that “delivers a net fiscal surplus of £32.5 billion a year to the national economy.”
John’s colleague Clare Coghill, the leader of Waltham Forest who is London Councils executive member for business, Europe and “good growth”, said that a new £675 million fund announced by Hammond to help High Streets would be “welcomed by London boroughs who already work with local high street businesses to ensure they continue to thrive” in the face of “significant challenges”. Coghill also said that eligible businesses would be grateful for a one third business rate reduction, but added that “this short term measure is yet another sign that the business rate system is not working.”
Noting that London government is currently piloting 100% business rate retention and that the boroughs hope to eventually have control of business rates fully devolved to them, Coghill said: “We believe locally accountable politicians should be responsible for setting the tax and distributing it within the capital. This means listening closely to the views of London businesses to jointly design a new system.”
In a submission to the Treasury in advance of the budget, London Councils said the capital’s local government finances are “unsustainable” and warned in particular of a growing crisis in children’s services. Sadiq Khan has accused the government of “abdicating its responsibility to keep the public safe” by continuing to make cuts to police and youth service funding and criticised it for not providing the funding he thinks it needs for strengthening policies to combat poor air quality.