The analysis was carried out to gauge the true impact to the capital of the £1.166 billion cuts in funding for local government recently outlined by the government. The impact could be greater as the research doesn’t include any announcements that may be made in tomorrow’s budget.
Its findings show that the capital’s local authorities are set to lose £169.3 million - more than double previous estimates. This is through the combined reductions in general area based grants, funding for achieving Local Area Agreement targets and through other funding streams like Local Authority Business Growth Incentive grants and Housing Planning and Delivery grants.
With the Greater London Authority (GLA) set to lose £185.6 million it means London’s local and regional government is set to lose at least £354.9 million.
However, London Councils fears that the capital could lose even more funding as the government still have to outline how schemes like Building Schools for the Future will be affected by the cuts.
Chair of London Councils, Mayor Jules Pipe, said: “Local government has always known that like everyone else it was going to have to play a part in helping to reduce the national deficit caused by the global financial crisis.
“But the proportion of the national cuts that local government and in turn London is being asked to bear is extraordinarily high. As each new government announcement is made, that burden of cuts is increasing. The changes in funding around areas such as encouraging business growth and housing will directly hit local authorities.
“There is a great deal of concern across London that projects like Building Schools for the Future are under threat which could have a huge impact on much needed school improvements.
“It is vital that the government is upfront about what the true fallout of its steps to cut the national deficit is for councils.
“It is too early to say what impact cuts of this magnitude will have, as many authorities will be striving to mitigate their effects on local frontline services. There is no doubt that now more than ever we need the government to deliver on localism as London Councils called for in its all party pre-election Manifesto for Londoners.
“However, there is a limit to the extent that authorities can absorb these pressures and tough and often painful decisions will need to be taken.”
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