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London’s boroughs make eve of Budget appeal for covid help

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CROYDON IN CRISIS: According to London-wide figures published today, unemployment in the city is approaching half a million people while covid-19 has cost every borough in the capital £66m.
In Croydon, the latest estimate of the budget overspend has now reached a breathtaking £96.5m. As STEVEN DOWNES reports, tomorrow’s Budget is crucial for the future of all the city’s local authorities

Will Chancellor Rishi Sunak’s red boxes have all the answers for London’s councils? Pic: HM Treasury

As he prepares to issue his Covid Budget speech tomorrow, Chancellor Rishi Sunak holds the future of not only Croydon Council in his hands, but every other borough in the capital.

That’s according to London Councils, the capital-wide organisation of the 32 boroughs and the City of London, which has today, on the eve of the Chancellor’s Budget speech, called on Sunak to boost the city’s recovery from the covid-19 pandemic by giving local government the funding and powers to ignite the economy and boost jobs in an inclusive way.

London Councils estimates that total financial impact of the virus on London boroughs this year will be £2.2billion, half of which is additional spending and half of which is lost income.

In Croydon, according to figures presented to last night’s cabinet meeting, the council now has an overspend on its budget of £96.5million – up from £64million as recently as December. The council’s leadership is waiting anxiously on a decision from HM Treasury and the Ministry of Housing, Communities and Local Government over whether it will be allowed to borrow £150million to balance the books.

And while Croydon remains the only local authority to have issued a Section 114 notice because it is unable to balance its books, there are well-merited concerns that other boroughs are also close to the financial precipice.

“A cliff-edge ending to support would be catastrophic for businesses, workers and families across the city,” Georgia Gould, the chair of London Councils, warned today.

In its submission to HM Treasury ahead of tomorrow’s Budget, London Councils has outlined the challenges facing London as it continues to respond to the public health crisis.

London has experienced the largest number of job losses of any part of the UK – there has been a 157 per cent increase in unemployment claims between March 2020 and January 2021, reaching a total of 485,000 in London.

“Unemployment on this scale risks pushing significant numbers of families and households in London into poverty,” a statement by London Councils said.

Particularly hard-hit has been London’s hospitality sector, where more than 70 per cent of the workforce have used the coronavirus job retention scheme. Three-quarters of London’s arts, entertainment and recreational businesses are reporting a decrease in turnover.

London Councils’ is asking the Chancellor’s Budget to deliver for London:

London Boroughs said today, “From supporting local high streets to follow pandemic restrictions to finding safe accommodation for rough sleepers and running local testing centres, London boroughs have been at the forefront of the response to covid-19, but they have also been deeply affected by it.

“Councils will also be at the forefront of supporting families and communities hit hardest by job and income losses over the coming year.”

London Councils predicts that the government’s covid emergency funding could be £400million short of what the boroughs have spent.

“With much of this impact not hitting budgets until the next financial year, and additional spending and income losses likely to continue, the financial impact of the virus will be felt well into 2021-2022 and beyond,” they said.

London Councils are seeking help in the Budget for the boroughs as follows:

“The Budget must recognise that businesses, workers and local councils will be under enormous pressure for many months as pandemic restrictions are eased and as we seek to recover,” said Gould, the leader of Camden Council.

London Councils’ chair George Gould: borough finances are on ‘a cliff edge’

“London typically provides a net surplus of £39billion to the Treasury. Targeted investment to support businesses and workers in the capital and across the country, supported by local leaders, is the surest route to a sustainable and inclusive economic recovery, and the best way to avoid real harm to Londoners just looking to get back on their feet after the challenges of the last year.

“London boroughs are at the heart of their communities and have played a pivotal role in responding to covid-19 – protecting the most vulnerable, delivering new services and working closely with government to communicate advice and information to our residents.

“We need financial certainty and stability to continue delivering effective services, to keep people safe and to help businesses through the unpredictable months ahead.”


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