Sadiq Khan will reduce jobs and slash his flagship climate policy in half to balance City Hall budgets hit hard by the pandemic. The Mayor will publish his slimmed down Greater London Authority (GLA) spending plans tomorrow, cutting £38 million over the next financial year.
City Hall today warned of an “unprecedented” fall in Business Rates and Council Tax income as a result of the coronavirus. It is set to lose £493 million over this financial year and the next, according to latest estimates.
Mayor Khan’s draft budget – seen tonight by the Local Democracy Service – will rely on £86 million of reserves next year. The Mayor is also setting up a £500,000 war chest to cover the cost of redundancies.
Though the number of job losses is not yet confirmed, the budget states that “it is clear” there will be a reduced “headcount” at City Hall.
Khan’s flagship Green New Deal – a plan to make London carbon neutral by 2030, announced in January – will have its budget reduced to £22 million. His revised budget will focus on the immediate and longer term recovery from the virus, based on the priorities set by the London Recovery Board. The emergency committee – led by the Mayor and London Councils – has nonetheless retained the 2030 target to make London carbon neutral.
The Board is also pushing for high street regeneration, better youth services, more jobs for Londoners, improved digital access, and more mental health support in the capital. Khan said the new budget provides “a chance to reimagine our city,” and blamed the government for imposing cuts on local government “at the worst possible time”.
“Ministers are refusing to refund City Hall, the Met police, local councils, Transport for London and other public services for the full cost of tackling Covid-19 and the income we’ve lost as a result,” he said. “This only makes our job harder – but I remain steadfast in my commitment to do everything possible to aid London’s recovery from this awful pandemic.”
The GLA budget covers City Hall spending, with major projects on affordable housing, rough sleeping and adult education, as well as the environment. The £602 million cash pot for next year includes £390 million from external sources, including government grants, plus the £86 million reserves. The remaining £126 million comes mainly from Business Rates and Council Tax – but this is nearly a quarter (23%) less than in the last financial year.
The Mayor plans to make £12 million savings from back office cuts such as human resources and technology. This figure includes the already announced savings that will begin next year when City Hall moves to the Royal Docks in Newham. The remaining cuts will come from frontline schemes, but the nature of these is not yet confirmed, and will depend on final Business Rate and Council Tax income to be confirmed early next year, City Hall said.
The cuts announced today – less than 2.5% of next year’s Greater London Authority (GLA) budget – still leave significant savings to be made elsewhere. London Assembly sources today branded the changes a “drop in the ocean” and warned that the Mayor is pushing for proportionately bigger cuts in other areas.
Budgets for the other bodies the Mayor oversees – including the Metropolitan Police and London Fire Brigade – will be published by the start of next month, according to an announcement today.
The Met, which relies more heavily on the taxes accruing to City Hall, is facing a £110 million cut, with £25 million coming from the fire service. Khan has previously said local government could not have prepared for the “scale of the challenge” from Covid-19, but pledged to protect frontline services.
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