LONDON LABOUR COUNCILLORS WARN OF FUNDING CRISIS AND CALL FOR BUDGET ACTION
Labour councillors from across London have warned of an impending funding crisis facing local councils and have called for action in this week’s Autumn Budget.
By the end of the decade (2019/20), core funding from Central Government to local authorities in London will have fallen by 63 per cent in real terms since 2010. The cumulative effect of these funding cuts, inflation and rising demand for services will create a further funding gap in London local government of approximately £1.5 billion in 2019/20 – three times the estimated general fund unallocated reserves available.
Today (20th November), Cabinet Members and Opposition Spokespeople responsible for Finance in 22 boroughs have written to the Chancellor urging action to help them continue to deliver vital local services.
The councillors have also called for a local government pay rise (funded by Central Government), housing measures to build more council homes and specific funding to tackle the growing funding crisis in children’s social care.
Cllr Andy Hull, Executive Member for Finance, Performance and Community Safety at the London Borough of Islington, said:
“Local councils deliver vital services on which Londoners rely. From care for elderly residents, to tackling anti-social behaviour, the services cash-strapped councils provide are in growing demand. That’s why we need the Government to announce urgent action in this week’s Autumn Budget that will allow councils to protect services, and to tackle vital issues such as building more council homes, providing support for vulnerable children and giving dedicated council staff a fair pay rise.
“Labour councils across London have worked hard to protect frontline services. We have taken innovative approaches to redesigning services and cutting back-office costs, all so that we can make a difference on the issues that matter most to working people. But the Government must realise that the funding crisis facing local councils is only getting worse. The Chancellor must act in this week’s Budget.”
The councillors’ letter sets out three specific areas where the Chancellor should take action on Wednesday (22nd November) –
- Local Government Pay – council employees have not seen a real terms increase in their salaries since 2008/09, and a fair pay settlement, which is fully funded by Central Government, is required.
- Housing – whilst Labour-run councils continue to build new genuinely affordable homes, specific action is required to allow more council homes to be built. By lifting the borrowing cap on the Housing Revenue Account, councils could build thousands of new homes for social rent.
- Children’s Social Care - 27 of 30 London boroughs have reported overspending in children’s social care budgets last year, as a national increase in the number of vulnerable young people is felt in the capital. The Local Government Association has estimated there will be a £2 billion national funding in children’s social care services by 2020. The total number of looked after children in the country reaching a new high of 72,670 in 2016/17.
The councillors’ calls have been backed by the GMB trade union, with London Regional Secretary, Warren Kenny, commenting:
"We fully support this call for additional funding to London Borough Councils and a lifting of the borrowing cap on the Housing Revenue Account.
“Nearly a quarter of the workforce has been cut in London Borough Councils since 2010 with over 57,000 jobs going. The bulk of these cuts have been in social care, health, leisure and libraries and doubly impact on our members as many of them live and work in London.
“Funding reductions have led directly to cuts in front line services impacting on the most vulnerable and those in need of support. Housing and children's social care are in crisis.
“GMB members working in local government are dedicated and loyal, doing the best they can in very difficult circumstances, but their pay has fallen significantly in real terms with many having to rely on benefits to get by. We want to see this Government fund a proper pay increase for local government workers in 2018.
“The time has come to end austerity measures, stop the cuts and begin funding our councils properly."
The councillors have also called for local councils to retain the full receipts of Right to Buy sales without restrictions, if the regrettable policy of Right to Buy is to persist; and to stop the planned forced sale of ‘high value’ void council homes.
The letter also notes that London accommodates around 45 per cent of the Unaccompanied Asylum Seeking Children (UASC) in the UK – young people who are often fleeing horrendous circumstances. However, Government funding only covers 50 per cent of cost of supporting these young people, and there are no financial resources to support UASCs when they reach the age of 18, despite local authorities remaining responsible for them until they are 25. The councillors have called for Central Government to both provide full funding to local authorities to support UASCs and to extend this support to the age of 25.
The Labour councillors have come together through the campaign group ‘Red Lines’, which brings together Labour councillors in London to stand up for Londoners against damaging Tory government cuts.
The following councillors have signed the letter -
Cllr Andy Hull, London Borough of Islington
Cllr Fiona Colley, London Borough of Southwark
Cllr Andy Gibbons, London Borough of Wandsworth
Cllr Margaret McLennan, London Borough of Brent
Cllr Robert Atkinson, Royal Borough of Kensington & Chelsea
Cllr Adam Swersky, London Borough of Harrow
Cllr Richard Olszewski, London Borough of Camden
Cllr Dominic Twomey, London Borough of Barking & Dagenham
Cllr Kevin Bonavia, London Borough of Lewisham
Cllr Angela Wilkins, London Borough of Bromley
Cllr David Boothroyd, London Borough of Westminster
Cllr Rebecca Rennison, London Borough of Hackney
Cllr Mark Allison, London Borough of Merton
Cllr Alan Deadman, London Borough of Bexley
Cllr Dino Lemonides, London Borough of Enfield
Cllr Barry Rawlings, London Borough of Barnet
Cllr Kam Rai, London Borough of Redbridge
Cllr Denise Hyland, Royal Borough of Greenwich
Cllr Imogen Walker, London Borough of Lambeth
Cllr Clare Coghill, London Borough of Waltham Forest
Cllr Jason Arthur, London Borough of Haringey
Cllr David Edgar, Tower Hamlets London Borough Council
NEW FIGURES SHOW THAT GOVERNMENT CUTS TO LONDON COUNCILS
ARE PUSHING THE NHS IN THE CAPITAL TO THE BRINK
In the week that councils across the capital set their budgets, London’s Labour councillors are warning of a £750 million black hole in social care funding that is pushing the NHS to the brink.
Central government funding for local councils has been slashed. In the decade from 2010, government funding for councils will have fallen by 70 per cent. The most deprived areas of the country have been hit hardest. London, with massive government cuts to its police service, schools and councils, is being bled dry.
The impact of government cuts is increasingly clear on social care and the NHS. New figures from NHS England show that the number of NHS bed-days lost to delayed transfers of care in the capital has hit a record high. In December, 16,000 bed-days were lost, up from 11,000 in December 2012. The rise in delayed discharges has been driven by patients who cannot be discharged because they are awaiting a placement in a residential home or a nursing home or waiting for a care package. This accounted for 7,000 bed-days in December 2016, double the number five years earlier. The growing challenge of delayed transfers of care was portrayed in the recent reality TV series, Hospital, which was set in London.
As a result of the savage government cuts to council funding, the vast majority of London boroughs are being forced to raise council tax to protect vital public services. But even if every borough implemented the government’s adult social care precept in full and raised council tax by 1.99 per cent in each of the next three years, a black hole of over £750 million would still remain in council finances to pay for adult social care in the capital by 2020.
There is a growing national consensus about the need for more funding for adult social care. Sir Simon Stevens, Chief Executive of NHS England, recently highlighted the impact of cuts to social care on the NHS, saying, “If there were to be any extra money available any time soon, then in my opinion social care should be at the front of the queue”.
Cllr Andy Hull, Chair of the Red Lines campaign group and Executive Member for Finance at the London Borough of Islington, said:
“The government is shifting the cost of caring for older, disabled and vulnerable people onto council taxpayers, leaving London local authorities facing a financial black hole. We warned last year of the widening funding gap, but we have not seen any serious action by the government to plug it. This government failure is now having a damaging impact on the NHS”.
“The government’s social care precept is a sticking plaster on a haemorrhage. Even when the precept is applied in full, with hard-pressed council taxpayers footing the bill, there remains a £750 million black hole in resources to pay for adult social care in London by 2020. The Chancellor must use his Budget next month to announce an urgent review of adult social care funding and give local councils the resources they need to support their residents.”
Jonathan Ashworth MP, Labour’s Shadow Health Secretary, said:
“Government cuts to social care funding are a double whammy. They are hitting council taxpayers in the pocket, and NHS patients are paying the price. Labour councils are working hard to keep services running but relentless financial pressure from the Government is making their job impossible. Ministers know that the money available won’t meet the needs of everyone looking for social care, but it’s not right that some areas like Surrey get special treatment while others lose out. The Government are creating a two tier system. This is a national problem of the government’s making and it demands a national response.”
- NHS England data showing increase in DTOCs between December 2011 and December 2016 –https://www.england.nhs.uk/statistics/statistical-work-areas/delayed-transfers-of-care/
- London’s population of older people is set to rise by more than 6 per cent between now and 2020.
- Around 175,000 Londoners are in receipt of adult social care services from local councils this year, with the number set to increase to over 180,000 by 2020.
- London councils combined spent £2.2 billion on adult social care over the last year, which represents over a third of all their spending. Some boroughs spent as much as 43 per cent of their budgets on providing care and support for older and vulnerable residents.
- The Local Government Association has observed that, even after full application of both the government’s adult social care precept and the Better Care Fund, there will be a national funding gap for adult social care of £2.6 billion.
- The Government’s separate ‘Adult Social Care Support Grant’ will also not address the funding shortage facing London councils, as funding for the £241 million national scheme is taken from top-slicing the New Homes Bonus budget, meaning London is actually a net loser in funding by around £11 million in 2017/18.
15 Labour councils in London have confirmed they will not implement the Tory Government's Tenant Tax.
On 21st November the Housing Minister announced that the Tenant Tax (Pay to Stay) would no longer be compulsory for local councils to implement.
Today, 15 Labour Housing Leads from across London councils have co-signed a letter to the Evening Standard confirming they will not implement the Tenant Tax.
The Tenant Tax was part of the Housing and Planning Act 2016, and would have seen council tenants in households earning £40,000 or more in London charged an extra 15% tax on income over that threshold.
Labour councillors from across London came together to campaign against the Tenant Tax, including writing directly to the Housing Minister with stories from real Londoners who would have been affected by the Tenant Tax.
Joint Letter from Labour Housing Leads in London -
Working people should not be forced to pay more tax simply because they are council tenants. That is what the Government’s Tenant Tax (Pay to Stay) proposed to do.
We welcome the announcement by the Housing Minister that this policy will no longer be compulsory, and thank him for listening to our concerns and those of real Londoners who would have been forced to pay 15% more tax.
As Housing Lead Members for Labour-run councils across London, we confirm that we will not impose the now voluntary Tenant Tax. We call on all other boroughs and housing associations to pledge to do likewise.
We remain deeply concerned and opposed to the Government’s plans to force councils to sell ‘high value’ council homes and to make people less secure in their homes by banning new lifetime tenancies for council tenants.
We hope to work with the Housing Minister further on rethinking these proposals.
Cllr Diarmaid Ward, London Borough of Islington
Cllr Averil Lekau, Royal Borough of Greenwich
Cllr Katherine Dunne, London Borough of Hounslow
Cllr Farah Hussain, London Borough of Redbridge
Cllr Sirajul Islam, London Borough of Tower Hamlets
Cllr Glen Hearnden, London Borough of Harrow
Cllr Stephanie Cryan, London Borough of Southwark
Cllr Khevyn Limbajee, London Borough of Waltham Forest
Cllr Alison Butler, London Borough of Croydon
Cllr Matthew Bennett, London Borough of Lambeth
Cllr Ken Clark, London Borough of Newham
Cllr Clayeon McKenzie, London Borough of Hackney
Cllr Pat Callaghan, London Borough of Camden
Cllr Damien Egan, London Borough of Lewisham
Cllr Ahmet Oykener, London Borough of Enfield
Pictured - Labour councillors at the Axe the Act demonstration on Wednesday 23rd November 2016.
The Tory Tenant Tax will hit working people in London. Labour councillors from across the capital are urging residents to sign the petition against this unfair Tory Tenant Tax.
The Tories’ new law will -
- Make tenants pay 15% more tax for every £1 they earn over £40,000 per household.
- Force councils to sell hundreds of homes each year, making it even harder for local people to find an affordable home in London.
- Ban new lifetime tenancies, ending the security that council tenants are currently offered.
Red Lines is on your side. Together we can stop the Tories.
Working people should not have to pay extra tax just because they are council tenants. The Tory Government’s new law will force working people who are council tenants to pay a Tenant Tax.
Labour Councillors in London, alongside trade unions representing working people across the capital, call on the Government to abandon the introduction of this Tory Tenant Tax.
Theresa May says she wants to support the ‘barely coping’ and stand up for the working poor. This policy represents a direct attack on just these people. Red Lines is urging the new Prime Minister to rescind this regressive policy, devised under her predecessor, before it is too late.
The Tory Tenant Tax is part of the Housing and Planning Act. It will introduce a new tax for tenants living in council housing who have a combined annual household income of over £40,000 in London. The Tories will force those affected to pay a 15% additional tax on every pound they earn above £40,000.The threshold for household income at £40,000 per year is too low.
It means two people receiving the 'real' London Living Wage would have to pay the Tenant Tax. It will also see a newly qualified teacher and nurse living in a council house in London hit with a charge of around £750 per year. Many households will struggle to meet the new charge.
The Tory Tenant Tax will apply to tenants regardless of their age, the makeup of their household or how long they have lived there. Households that receive benefits (Housing Benefit or Universal Credit) will not have to pay the Tenant Tax.
Councils will have to collect this money, with all proceeds going to the Tory Government who continue to make damaging cuts to our community.
The Tory Tenant Tax will also be a disincentive to work. People will have to consider whether taking on a job or a promotion will be worth it because, if they are pushed over the new income threshold, any benefit could be lost through having to pay the Tory Tenant Tax.45 signatures
Axe the Tory Tenant Tax Petition
Working people should not have to pay extra tax because they are council tenants.
We object to the Tory Goverment’s new law that will make tenants pay 15% more tax for every £1 they earn over £40,000 per household.
We, the undersigned, call for the Tory Government to stop the Tory Tenant Tax.
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Tories hit London hard whilst protecting their own areas says Sadiq Khan MP
In the week councils across London set their budgets, Labour’s candidate for Mayor of London Sadiq Khan, has warned that unprecedented and unfair cuts in funding from the Tory Government will hit local services and the most deprived communities in London hardest, whilst wealthier areas are protected.
Government funding for councils has been cut by 40 per cent since 2010 with poorer areas hit hardest. The Government recently announced £300m funding for councils but a staggering 83 per cent of this funding will go to Conservative controlled authorities. Surrey and Hampshire will receive £43 million, whilst London gets only £28 million. Of the £28 million given to London, £16.8 million went to Tory controlled boroughs, compared to just £3.3 million to Labour controlled boroughs. The Tories are protecting their own areas whilst slashing funding for London. It shows Tory claims that “we are all in this together” to be hollow and cynical.
Most London Boroughs are having to raise council tax next year in order to offset some of the funding lost due to Government cuts. However, even if London Boroughs increased council tax by the maximum allowed, it will not come close to making up for the scale of cuts in Government funding. With councils bound by law to set balanced budgets, the scale of the cuts to councils mean most areas will have to both increase council tax and reduce spending. Government cuts mean Londoners will face both higher council tax and cuts to local services.
Tory cuts to councils risk serious consequences for London. Independent research shows planned cuts to council funding will lead to a £1.7bn black hole in social care funding by 2020 which will hit the most vulnerable and undermine our NHS. Other much-valued local services will inevitably be hit too; from libraries and leisure centres to street-sweeping and parks.
Even in tough times, Labour is making a difference for communities across London. Southwark is introducing free gyms and swims for all residents to encourage healthy living. Lewisham are tackling in-work poverty through a business rate discount for employers who commit to paying the Living Wage. Islington has committed to spending an additional £500k on additional targeted support and mentoring to help young people most at risk of turning to gangs and crime. Harrow has been awarded the ‘best small business friendly’ Borough in London for its work with local employers to create apprenticeships and training for residents.
Sadiq Khan, Labour’s candidate for Mayor of London said;
“The Tories are hammering local services in London – and the capital is being hit worse than any other part of the country. And the poorest areas of London are suffering the most. I was a Councillor for twelve years - I know the crucial difference that local services can make to Londoners lives. Londoners need a Mayor who will stand up for the capital and work alongside local councillors to fight for a fairer deal for London.”
Steve Reed MP, Shadow Minister for Local Government said;
“While the Tories talk about ‘One Nation’, they are hitting the poorest hardest. At the same time they are blatantly misusing public funds by giving pre-election bungs to their own areas. As a former leader of a London Borough, I am deeply concerned by the scale of the Tory cuts inflicted on councils across our city. The Tories need to think again. If they don’t, Londoners will get the chance to give their verdict in May.”
Heather Wakefield, Head of Local Government at UNISON said;
"The Government's funding cuts to local government are doing real damage to councils and communities in London and across the country. Tens of thousands of local government jobs have been lost across London, and if these cuts continue, many more will go."