Assembly warns over government funding cuts to London

London Assembly Members warned today that the Government’s proposed “Fair Funding 2.0” model could slash borough budgets by as much as 30% at a moment when councils already face a £4.7bn deficit over four years.

There is particular worry over a potential £1.5bn hit to children’s services, driven by an underestimated level of need. The Assembly also argued that the new formula overlooks deprivation linked to London’s high housing costs.

Assembly Members are pressing the Mayor to lobby for a reversal of the cuts and demand a corrected or delayed children’s services formula so London receives funding that aligns with actual demand.

Lord Bailey of Paddington AM, who proposed the motion, said:

“The Fair Funding review could deprive London of billions of pounds worth of funding at a time when council budgets are already being stretched to breaking point. This may result in a decline in London services - with some boroughs losing as much as 30% of their funding - which Londoners are still paying for via tax.

“The Mayor must join the Assembly in calling for the Government to reconsider the review’s proposals, and ensure that funding for London truly is fair.”

The full text of the motion is:

The Assembly notes with concern that the Government is planning to make severe funding cuts to London under its “Fair Funding 2.0” proposals, with some London boroughs losing up to 30% of their funding.

This comes at a time when London boroughs are facing a cumulative £4.7bn shortfall in their budgets over the next four years, more than double the previous forecast last year.

The Assembly is particularly concerned that the Government’s proposals could cut funding for London’s children’s services by £1.5bn, having drastically underestimated the level of need.

The Assembly also shares the concerns raised by London Councils and others, that the proposed new funding formula does not properly account for deprivation resulting from London’s high housing costs.

The Assembly calls on the Mayor to urgently lobby the Government to reconsider its Fair Funding Review proposals, reverse its planned funding cuts to London boroughs, and ensure that London receives its fair share of funding to meet Londoners’ needs. In particular, the Mayor should join us in calling for the Government to correct the children’s services formula or delay its implementation until it is properly reviewed.

The meeting can be viewed via webcast or YouTube.

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