London’s local authority budgets have dropped by nearly a fifth over the last eight years

New analysis by Centre for London has revealed that London’s local authority budgets have dropped by nearly a fifth (17 per cent) per head over the last eight years, with inner London boroughs hit the hardest.

The analysis found that all principal service areas, with the exception of children’s social care, have seen budget reductions, with planning and development, highways and transport and cultural activity budgets facing the largest cuts.

Taking London’s population growth into account, councils have seen an overall 17 per cent fall in their budgeted service expenditure per head, from £879 in 2010/11 to £729 in 2018/19 (excluding education, public health and police services).

This reduction rises to almost 35 per cent when inflation is considered.

Inner London boroughs have seen the biggest cuts – with Westminster (-32 per cent), Newham (-30 per cent), Tower Hamlets (-29 per cent), Hackney (-28 per cent), Camden (-25 per cent) and Wandsworth (-25 per cent) all seeing cuts of 25 per cent per head or above.

Just two councils, Barnet (+1 per cent) and Kensington and Chelsea (+10 per cent) have seen increases over the last eight years.

Urban authorities – in London and beyond – have previously been more dependent on government grants but have borne the biggest brunt of cuts under austerity, which have been applied evenly across councils.

Despite this, Centre for London’s analysis also suggests that councils are starting to see additional government funding and council tax for social services begin to feed through.

 Silviya Barrett, Research Manager at Centre for London said: “London boroughs, like other urban authorities across the country, have shown great ingenuity in adapting to hard hitting cuts, but they are running out of road. There are also concerns that the forthcoming Fair Funding Review will affect the longer-term funding allocations of those councils that have seen the biggest cuts.

“The drive for devolution seems to be stuck. It’s time to give the UK’s distinct localities the power and resources to set local tax levels and raise their own taxes.

“This would put service delivery back on a sustainable path, reducing the sense that local areas are competing for one ‘pot’ of funding. Fiscal devolution would also ensure decisions are taken as close as possible to those they affect, enabling boroughs to better shape services to suit their own local needs and strengthen their communities.”

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