The Leaders of 12 London local authorities have said:
We agree that in designing the settlement for local government funding, resource should be matched to need. Those areas of the country both least able to raise their own revenue and with the highest levels of resident need should be prioritised, and we welcome three-year funding settlements.
We welcome the extensive engagement of Ministers so far with local leaders, including via both the Local Government Association and London Councils.
We remain concerned that some of the data underpinning the Fair Funding Review 2.0 is inaccurate and means that the proposed formula does not effectively match resource to need.
High housing and other costs mean that 26% of London households are in poverty after housing expenses – that is a level of deprivation much higher than represented in the current formula. The proposed children’s services formula also vastly underestimates the need in London. If the inputs remain unchanged, these proposals will disproportionately impact already-deprived urban neighbourhoods and vulnerable families.
In our boroughs, it would become much more difficult to deliver services for elderly residents, families in need of support and children who require care. Those challenges jeopardise our ability to act as the growth engine for the UK economy.
Action needs to be taken on three aspects:
- The formula, in particular the CYPS formula, lacks accuracy and robustness. The data underpinning the formulae must be updated to ensure that: levels of deprivation take housing costs into account; the inputs around daytime population and visitor numbers are accurate; and demand for children’s services is accurately represented. More weight must be given to the cost of housing, and the poverty and deprivation that it directly causes in London.
- The transition period must consider the amount of time it reasonably takes to adjust to changes of this magnitude. Lengthening the transition period would prevent a cliff-edge and ensure all boroughs have the time to adjust to the changes, avoiding a scenario where councils are pushed into deficit and therefore forced to issue Section 114 notices.
- Devolving existing sources of revenue or reviewing new areas for boroughs to raise fund
Action on the three areas above would bring us to a less stark and more reasonable position. We support principle of reform and matching resource to need, and are concerned that the current proposals do not do this in all areas. All of our boroughs are keen to constructively engage with Government to get this right and ensure we can continue to deliver the services our residents deserve.
Statement signatories:
Cllr Adam Hug, Westminster (Chair of CLF)
Mayor Brenda Dacres, Lewisham (Vice-Chair of CLF)
Cllr Peray Ahmet, Haringey
Cllr Elizabeth Campbell, Kensington and Chelsea
Cllr Steve Cowan, Hammersmith and Fulham
Cllr Simon Hogg, Wandsworth
Cllr Claire Holland, Lambeth
Cllr Sarah King, Southwark
Cllr Una O’Halloran, Islington
Cllr Richard Olszewski, Camden
Cllr Gareth Roberts, Richmond
Mayor Caroline Woodley, Hackney