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London councils ‘running out of road’ to protect statutory services

London’s public services are “feeling the pinch of austerity” 10 years after the financial crisis, according to a think tank.

In a review of the spending of London’s local authorities, published in a special section of the London Intelligence, the Centre for London found that spending in the capital has fallen “significantly” over the past eight years.

Total budgeted service expenditure by London’s 33 councils – excluding education, public health and police services – fell from £7bn in 2010-11 to £6.3bn in 2017-18, a reduction of 10.3%.

The last two years have seen outturns higher than budgets as councils begin to dip into the financial reserves that they had built up during the previous four years.

When population growth over the period is accounted for, the think tank found that the fall in spending is even steeper, with budgeted spend per head dropping by 19% between 2010-11 and 2017-18.

However, figures used do not account for inflation, so in real terms the centre says that the fall will have been steeper still.

Inner London boroughs have been hit hardest by budget cuts, with Camden and Westminster’s budgets each falling by 29% and Newham seeing the largest per capita fall of 33%.

Only the outer boroughs of Sutton, Barnet, Bexley, Richmond and Havering had falls of less than 10%.

The variation in spend per resident has dropped over time, with the rate between the highest and lowest spending boroughs falling from £670 to £460 per person between 2010 and 2017.

Planning and development was the service that saw the largest fall in spending, with a drop of 55% per head across the capital, despite the urgency of London’s housing crisis.

However, the number of planning permissions local authorities are decided on has remained relatively constant over the last seven years, although the think tank warns that the higher targets in the new draft London Plan will pose a further challenge.

Social care services for children and adults saw the smallest fall in spending, decreasing by 2.5% and 10.6% respectively.

In fact, an increasing proportion of funds are spent on adult and child social care, accounting for 38% and 34% of these totals in 2017-18, compared to 34% and 20% in 2010-11.

Richard Brown, research director at Centre for London, said: “Newly elected London councillors are this week arriving at town halls that have been on the front line of austerity.

“London boroughs, like other metropolitan authorities, have been hard hit by spending cuts, with the result that delivering on manifesto promises – especially on increasing the supply of affordable housing – may be challenging.”

He said that councils have shown “ingenuity” in finding efficiencies and protecting statutory services, but that they are “running out of road.”

“Continuing austerity is likely to force some harsh choices in the years to come.

“Local authorities should 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,” Brown concluded.


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