This week’s budget kicks off a year of pivotal decisions for London’s public services. The Fair Funding Review and the 2020 Spending Review will follow in rapid succession, along with the introduction of 75 per cent business rates retention and the devolution White Paper. London government and other representative bodies must work together to ensure the capital is included and fairly represented in the debates to come.
The challenge facing us is already familiar to London’s local councils. Boroughs have spent a decade dealing with greater funding reductions than the rest of the country faced while others have repeated ill-informed myths about our wealth, ignoring the real levels of need and poverty in London. That is why we are among those working hardest to influence key government decisions by providing a full and accurate picture of our city in all its complexity.
In that spirit, London Councils’ budget submission to the Treasury contains a series of key investment and taxation asks that we believe would not only benefit London but also allow us to continue to help national government meet its priorities for the country as a whole.
The capital’s population is set to reach 10 million people in the next 20 years. A further 800,000 commute in and out of every day from elsewhere in the UK. To support our burgeoning city while also reducing carbon emissions, strategic infrastructure investment will be vital. Public transport is central to this – from massive projects such as Crossrail 2 to smaller yet hugely impactful schemes such as the Bakerloo Line extension.
We also need investment in housing of all types and tenures to ensure Londoners have access to safe, comfortable and above all genuinely affordable homes. Average house prices and rents in London are twice those in the rest of the country. We support two-thirds of all the country’s homeless families – there are 57,000 of them, including 88,000 children, in temporary and often inadequate, accommodation.
Tackling this will require both changes to the benefits system and greater freedom for councils to invest the money they receive from Right to Buy sales. New housing, roads, schools and GP surgeries will also be essential to Londoners’ livelihoods and wellbeing.
We recognise that these are significant asks – which is why we’re open to conversations with the government about ambitious new funding mechanisms for infrastructure schemes in the capital, such as tax increment financing.
We also need to invest in our people to drive economic success. Most of London’s employment growth has been in low-skilled jobs over the past decade. We have more skills shortages than any other region and inequalities in the labour market persist.
A new era of devolution to create holistic skills and employment systems for cities and city regions – London among them – would give local leaders the tools and resources they need to genuinely improve people’s lives through access to high quality jobs.
Given London’s skills challenges, we’re also calling for the budget to confirm that projects supporting low-skilled and disadvantaged Londoners previously funded by European Union programmes will continue to receive the same levels of funding from the UK shared prosperity fund.
Finally, local government finance is in urgent need of reform. By 2021-22 councils will receive 90 per cent of their funding from Council Tax and retained business rates, but it is doubtful that either tax is fit for purpose.
We will be looking for indications from the new chancellor that he and the Treasury are alive to these issues. As well as reforming existing taxes, there is a powerful case for considering what other fiscal levers could be devolved to local government to fund services and increase accountability to local communities and taxpayers. Working with the Mayor, London boroughs have a track record of successful collaboration on devolution and we stand ready to develop new approaches.
Even before taking the impact of COVID-19 – coronavirus – into account, this is a crucial period for the UK economy. As well as managing the spread of the virus, government is negotiating our exit from the EU and responding to climate change, as well as dealing with serious long-term issues such as how best to care for our ageing population.
In this context, it is imperative that London local government is firing on all cylinders. And that means giving us the powers, freedoms and resources to support sustainable growth.
Peter John is chair of London Councils, the body representing all 33 of the capital’s local authorities.
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