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The£442m government funding boost for the capital announced today will help enhance the quality of people's lives ...
The£442m government funding boost for the capital announced today will help enhance the quality of people's lives in the capital - says the Association of London Government (ALG).

London will receive a 5.3 per cent increase - more than double the rate of inflation - in the money it will be getting from the government in the next financial year. This follows the 2003/2004 local government finance settlement announced by the local government minster, Nick Raynsford (see LGCnet).

The additional resources for the capital follow calls from the ALG and London boroughs to ensure the government's new formulae, for distributing the funding to council's across the country, took into account the challenges the capital faces on a daily basis.

It was feared that the capital could lose up to£600m through the new formulae, but partly thanks to the ALG's lobbying, all London's boroughs will receive at least a 3.5 per cent increase in funding compared to last year. Some are set to get up to 8 per cent more.

ALG chair Robin Wales said: 'On the whole this is a better settlement than we expected in the summer when the government consulted on changes to the formulae, and taking into account the impact of the Census 2001 data for some of our authorities.

'We are pleased the government has listened to our call for a fairer funding deal for the capital. The additional£442m that London is set to receive will help boroughs in their drive to develop services for their local communities.

'No where outside the capital suffers from the same intense combination of challenges London boroughs face on a daily basis, including homelessness, education, asylum, recruitment and retention of key workers and improving the environment.

'We made a very clear case to the government and we are pleased the new formulae take on board many of our concerns.'


Each year the government announces the level of financial support to local authorities. This announcement is provisional with the final figures being approved in January 2003.

During this year the government have carried out an extensive consultation on the formulae dictating how funding is allocated to local authorities.

The government allocations have a significant impact on the level of council budgets, the services authorities provide and the level of council taxes.

Boroughs will now look at their grant allocations, together with their individual priorities and pressures to decide on their level of council taxes. It is far to early at this stage to predict what the final impact of the settlement will be on borough council tax bills.

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