New analysis shows London councils ‘running out of road’ as spending cuts continue

New analysis shows London councils ‘running out of road’ as spending cuts continue

London’s local councils are spending 19% less per resident than they were seven years ago when the Conservative-led coalition government began cutting local authority funding, according to a new analysis by think tank Centre For London.

Planning and development budgets have been reduced the most, down 55%, followed by spending on cultural activities such as sport, tourism and libraries (down 41%), and on highways and transport, including street lighting and traffic management (down 38%).

Social services and other statutory duties have been suffering least as councils have prioritised in particular adult and child social care, which now account for 62% of all spending compared with 54% in the 2010/11 financial year. Spending on social services altogether has fallen by 10.6%.

The biggest spending drops have been in Inner London, led by Newham, which has seen a remarkable 33% fall, followed by Westminster and Camden (both 29%). At the other end of the scale, Sutton’s spending has fallen by only 0.4%. Labour-run boroughs on average continue to spend more than those controlled by Conservatives, Lib Dems or under no overall control, though the gap has closed due to Labour councils having to implement the largest service cuts.

The research, which appears in the latest issue of the think tank’s London Intelligence statistical bulletin, also shows that vulnerable Londoners in particular are feeling the effects of lower spending, with 1,600 households in the capital currently classified as homeless and in priority need, a 70% increase on the previous year’s figure (the number of homeless households who are being housed by their local authority stands at 54,000).

Richard Brown, Centre For London’s research director, commented that “newly elected London councillors are this week arriving at town halls that have been on the front line of austerity. Until now, councils have shown ingenuity in finding efficiencies and protecting statutory services, but they are running out of road.”

Brown says that delivering manifesto promises, especially on delivering affordable housing, will be challenging, and urges the capital’s local authorities to “put party politics aside and collectively lobby for a new funding settlement with fiscal devolution and local taxation reform, to put London services on a sustainable footing”.

The London Intelligence report says that “total budgeted service expenditure” excluding education, public health and policing by the capital’s 33 local authorities fell from a total of £7bn in 2010/11 to £6.3bn in 2017/18, a fall of 10.3%. When London’s rapid population increase during that period is taken into account, the 19% fall in per head expenditure is arrived at – a reduction from £879 to £715. the calculation does not account for inflation, meaning that “the real terms fall will have been steeper still”.

Along with Sutton, only Barnet, Richmond, Bexley and Havering are spending below 10% less than they were seven years ago. The percentage drop figures for all the boroughs are shown in the Centre for London graphic below.

Read the local authority spending section of The London Intelligence (Issue Four) here.





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