London’s boroughs are tackling a funding gap that threatens vital services

London Councils have warned that boroughs in the nation’s capital will have to make huge savings next year, unless the government promises to boost funding for essential services.

The current energy crisis, inflation and rising demand for services mean that huge financial pressures are being placed on budgets, as well as opening a wide gap between the funding councils receive, and the cost of maintaining services. Using the government’s current funding plans as a basis, London boroughs face a gap of £400 million this year, rising to £700 million next year.

For context, the £700 million gap projected, is equivalent to the total annual expenditure on public health services in London. Alternatively, that amount would also fund retrofitting 27,000 homes to achieve net zero goals, deliver 46,000 apprenticeships to provide more skills and opportunities to young people, or fund a nursing home year car for 64,000 residents.

The cross-party group reported that boroughs are being forced to consider drastic cuts to services such as social care, bin collections and homelessness services.

As the government prepares to unveil its plans for public finance, the group is seeking protection for the services they provide to their communities. It also suggests that there should be funding assistance similar to that seen at the height of the Covid-19 pandemic, to help councils cope with the financial shock and ensure that key services are delivered effectively.

Chair of London Councils, Cllr Georgia Gould, said:

“The funding outlook for the boroughs is beyond bleak. The scale of the savings required is huge and will inevitably mean cuts to vital frontline services that so many Londoners rely on.

“Boroughs will do everything we can to protect our communities but a £700 million funding gap next year will force us into the poorest of the tough decisions unless the government offers new support .

“Just as ministers worked effectively with councils during the height of the Covid-19 pandemic, we need a similar spirit of cooperation in the face of the cost-of-living emergency. Properly funding local services is essential for supporting poor households and generating economic growth in our communities.

“We urge the government to listen to councils’ concerns and take swift action to prevent a bad situation from getting worse.”

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