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London boroughs address funding gap threatening crucial services

London Councils has warned that boroughs in the nation’s capital will need to make drastic savings next year, unless the government commits to boosting funding for key services.

The current energy crisis, inflation, and rising demand for services means that huge financial pressures are being put on budgets, as well as opening a wide ga between the funding that is being received by councils, and the cost of maintaining the 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 that is projected, is equal to the total annual spending on public health services in London. Alternatively, that amount would also fund the retrofitting of 27,000 homes to achieve net zero goals, deliver 46,000 apprenticeships to provide more skills and opportunities to young people, or fund a year of nursing home car for 64,000 residents.

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

With the government preparing to release its plans for public finances, the group is looking for protection for the services that they provide to their communities. It is also suggesting that there should be a boost to funding similar to that seen at the height of the Covid-19 pandemic, to help councils cope with financial shock and ensure that key services can be delivered effectively.

Chair of London Councils, Cllr Georgia Gould, said:

“The funding outlook for boroughs is beyond bleak. The scale of the savings required is colossal and will inevitably mean cuts to the 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 toughest of tough decisions unless the government offers new support.

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

“We’re urging the government to listen to councils’ concerns and take swift action to avoid a bad situation becoming even worse.”

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