Soaring inflation has left London’s city halls needing £700m to keep up companies and pay employees, London Councils has warned.
London Councils, the cross-party group representing all 32 boroughs and the City of London Corporation, is anxious that very important native companies and financial restoration will likely be jeopardised with out instant additional funding and certainty over future funding.
Although the federal government elevated native authority funding this 12 months, fast-rising inflation has successfully reduce £100m from the monetary uplift boroughs obtained for 2022-23.
Since the 2022-23 native authorities finance settlement in February – which delivered a £330m actual phrases improve in London boroughs’ core spending energy – the change in GDP inflation from 2.7 per cent to 4.1 per cent in March, means the funding improve is now value £100m much less in actual phrases than when it was agreed.
London Councils stated building contract prices for some tasks have risen by 20-25 per cent on account of labour pressures and rising materials prices.
This now makes many deliberate tasks unviable, affecting faculties, housing, and transport funding.
Councillor Georgia Gould, chairwoman of London Councils, stated: “Rising inflation and the cost-of-living crisis are having a crippling effect on families who are having to make increasingly difficult decisions about whether to eat or heat their homes.
“Boroughs welcome the government providing some much-needed extra support to households, and we are seeking a similar intervention to help councils deal with their massive finance pressures.
“Eye-watering inflation means our funding has effectively been cut by £100m already this year – and overall we face £400m of additional budget pressures.”
Pictured: Traditional English terraced homes with enormous council block within the background in south east London (Picture: London Councils)