Funding crisis: all London’s boroughs are struggling to balance their budgets with the reduced support they receive from the Tory government
Croydon is not the only cash-strapped council in the capital, as the body which represents all 32 boroughs and the City of London has predicted that there could be a £1.1billion black hole in Town Hall budgets over the next two years unless Chancellor Jeremy Hunt rattles the magic money tree in his emergency Budget on November 17.
London Councils has described the financial outlook for its members as “beyond bleak”.
London Councils represents authorities from all three main parties, including Conservative-controlled Croydon, and they agreed on this public appeal to the government about how desperate the situation is becoming, after piling soaring energy bills and the cost-of-living crisis on top of the impact of the pandemic, and all following a decade of Tory-imposed austerity.
The warnings from London Councils echo earlier concerns aired by the national organisation, the Local Government Association.
Georgia Gould, the leader of Labour-run Camden Council and the chair of London Councils, reckons that unless the government increases their funding, boroughs across the capital could be forced to make £400million-worth of cuts in the next financial year, with another £700million cuts to come in 2024-2025.
The cross-party group says savings on this scale would inevitably mean reductions to London’s local services. The councils have a statutory duty to protect services like care for children, the elderly and the vulnerable, which means that other aspects of civic service, such as emptying the bins, cleaning the parks and running libraries will face even deeper cut-backs.
Toughest of tough decisions: chair of London Councils, Georgia Gould
“The scale of the savings required is colossal and will inevitably mean cuts to the vital frontline services that so many Londoners rely on,” Gould said.
“Boroughs will do everything we can to protect our communities, but a £700million funding gap next year will force us into the toughest of tough decisions unless the government offers new support.”
The Department for Levelling Up, Housing and Communities told the BBC that London authorities had benefited from a rise in funding.
“This year, we have made an additional £3.7billion available to councils in England, including an extra £685million in London,” a spokeswoman said.
In Croydon, the Tory Mayor, Jason Perry, has not yet revealed any detailed plans for the borough’s 2023-2024 budget, beyond some self-pitying bleating that the budget he inherited in May was not “balanced”. That budget included £38million-worth of cuts to services, a condition of the government’s £120million capitalisation, or bail-out, for the borough following its financial collapse in November 2020.
Under the terms of that settlement with Whitehall, Croydon is expected to make a further £25million-worth of cuts to its budget in 2023-2024, and another £12million in the financial year following.
Mayor Perry has already begun making moves to further reduce Council Tax Support for the borough’s poorest residents, and is moving towards axing all funding to the borough’s charity and voluntary sector.
Read more: This is the stark human cost of the borough going bankrupt
Read more: Cynical, hypocritical and devious: benefit cut to hit thousands
Read more: Further £38.4m to be sliced from next year’s council budget
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Central government don’t actually fully understand what local authorities do and nor do they understand the impact of the last round of austerity.
I don’t think anyone working in the department for levelling up have many if any staff with local authority experience in there to explain it to them.
Cuts this big means that services for vulnerable adults will shrivel. Cuts this big mean that children will be at huge risk of abuse and neglect – there will be more Baby P cases. That’s before we get to libraries, rubbish collection and parks.
The conservatives should be prioritising getting to grips with understanding how the public sector functions as they have failed spectacularly since 2010.
Oh, the Tory government knows exactly what it is doing – outsourcing the blame and the pain for its cuts to local authorities, while they look to hand out tax cuts to the wealthy.