Spring Statement By Government Shows Welfare Cuts, Millions Of Houses To Be Built, But Little Support For Local Authorities.

Local Democracy reporter Sebastian Mann writes:

London councils have renewed calls for local government funding to be reformed following the Spring statement.

Chancellor Rachel Reeves’ speech, delivered on 26th March, laid out a series of welfare cuts and a hefty boost to defence spending, but little in the way of support for local authorities.

London boroughs receive around 28% less funding per person compared to 2010 and London Councils, which oversees the 32 boroughs, says they will be left grappling with a combined shortfall of at least £500million in the coming year.

The statement functioned as an update on how the national finances have fared since the Autumn Budget in October and is not a fully fledged budget in its own right.

The Chancellor of the Exchequer said the government was on track for a near £10billion surplus in its day-to-day spending by 2030, but benefits and Universal Credit will be cut by around £4.8bn.

Some £2bn has been invested in social and affordable housing, which she said will bring the government “within touching distance” of the national aim of building 1.5million new homes over the next five years. A further £13bn has been allocated for infrastructure projects across the country.

A spokesperson for Havering Council said changing planning laws will not “flick a magic switch and see thousands of homes built overnight”.

On top of funding new housing schemes, Reeves also announced a £625m construction skills package to “boost” training and produce 60,000 new workers over the next four years.

The council said: “Yes, there is a skills shortage and the announcement to fund further training is good.

“However, the cost of materials and construction are high, and there is still uncertainty around some of the legislation for safety in high rise blocks – which is contributing to the delays.”

Due to “systemic underfunding,” Havering was forced to borrow an unprecedented £78m last month to balance its budget. Its biggest pressures are social care and temporary housing – issues many boroughs struggle to tackle.

The spokesperson added: “It is clear that public finances are in a difficult place and the government needs to ensure that money is going to the right places.

“We will watch with interest to see the detail in how the savings announced around public sector reform will be spent. Particularly in supporting local authorities to ensure they can continue delivering vital services to residents.”

Calvin Bailey, the MP for Leyton and Wanstead, secured a debate in Westminster Hall yesterday to focus on the pressures councils face.

He said: “In Leyton and Wanstead, and across the capital, we value our local services hugely, so there is deep concern about pressures on borough budgets which threaten London’s future growth and prosperity.

“After so many years of underinvestment, the government is right to recognise that the council funding system needs reform.”

Claire Holland, the leader of Lambeth Council and chair of London Councils, said the “worsening crisis” had “worrying implications” for local services and the capital’s chance for growth.

She said: “The combination of years of structural underfunding, fast-rising demand for services such as homelessness and social care, and spiralling costs has pushed boroughs to the brink of bankruptcy.

“We know MPs share our concerns and want better funding solutions. Boroughs are as determined as ever to work with the government on our shared priorities, including more focus on prevention, delivering affordable housing, and boosting economic growth.

“Restoring stability to our budgets and local services is key to achieving this.”

Some three-million UK families will lose around £1,700 a year in welfare by 2030, according to data from the Department for Work and Pensions

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