Local Government Finance Settlement
With MPs due to discuss the local government finance settlement for 2023 to 2024 later today (Wednesday 8 February), London Councils has set out its key priorities for ensuring local services have adequate funding for taking on the capital’s challenges. While the settlement will deliver a funding uplift to boroughs, London Councils is highlighting the following concerns:
- High inflation and increased demand for council services – including from residents struggling due to the cost-of-living crisis – mean London boroughs will still need to make £100 million of savings in 2023/24 to balance their budgets.
- Given the cost-of-living pressures facing residents, it is disappointing that a third of the total funding increase available depends on boroughs raising council tax to the maximum permitted level.
- The funding uplift from the government follows a period of significant reductions. London boroughs’ overall resources will still be 18 per cent lower in real terms compared to 2010/11, even though population growth means there are around 800,000 more Londoners using local services.
- Short-term funding arrangements undermine boroughs’ ability to invest strategically. The 2023/24 funding settlement for councils is the fifth single-year settlement in a row, which makes it harder for boroughs to assess what resources will be available for services beyond this timeframe.
Chair of London Councils, Cllr Georgia Gould, said: “Boroughs play a vital role in supporting Londoners through the cost-of-living crisis, but for too long have been hampered by inadequate funding and a lack of long-term planning from central government. The entire system needs urgent reform.
“London faces a wide range of major challenges. Giving boroughs better funding tools is essential for investing in local services and enabling us to make faster progress in reducing poverty, driving inclusive economic growth, tackling climate change, and supporting Londoners’ other key priorities.”
You can read our briefing sent to London MPs here.