Red Lines

Councillors warn of funding crisis



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

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