Councils in London have not been unfairly overfunded during eight years of austerity and cutting the resources of boroughs to bolster other areas following the fair funding review would ignore the severe challenges facing local government in the capital, the new chair of London Councils has told LGC.
Peter John (Lab), who was elected to the role of chair last week taking over from Claire Kober, said the fair funding review is causing concern among councils in London “on a number of levels”. This is due to fears the review will be used as a mechanism to remove funding from the capital after strong lobbying from local government in other parts of the country.
He said London boroughs have had “opportunities” other councils have not due to continued economic growth in the capital which has enabled them to continue to fund services that have been sacrificed elsewhere.
But Cllr John added there has been a shift of private investment away from London to places such as the West Midlands and Manchester, and warned ongoing funding is needed to address problems caused by deprivation in the capital.
Cllr John, who is also Southwark LBC’s leader, said: “The approach to local government funding surely must be based on need and deprivation. That might not chime with every part of the country but [I will be saying to government] don’t take away from London, that is pointless because we still have massive issues that we need to solve.
“Even if we are doing well, that’s because we have been funded appropriately so don’t rob us to pay an area that has been historically underfunded - raise the level of funding to those areas.”
Asked whether it is fair traditionally wealthy councils such as Kensington & Chelsea RBC and Westminster City Council should continue to receive funding at current levels when so many other councils are finding it increasingly hard to balance budgets, Cllr John said standard indictors of deprivation should be the key driver of funding levels.
He said London Councils would be making the same arguments as other core cities “because they will be facing the same problems”.
Cllr John said the housing crisis in London had been caused not by failings in the private sector but by a lack of resources preventing councils building at scale, with just 22,000 homes built in the capital last year when 66,000 were required.
“It is so glaringly obvious it beggars belief that government hasn’t recognised it and said we have got it wrong for the last 30 years,” he said.
Cllr John said “capacity and capability” for councils to build is starting to be re-established through funding from the Greater London Authority but added private developers had a “key role to play”.
However, Cllr John said addressing community suspicion about regeneration schemes was “the challenge of our times” and limited delivery of new homes had led to greater scrutiny of levels of affordability. He added the London Plan is “policy rather than viability driven”, with a requirement that 35% of new homes are affordable.
The wider benefits of increased employment and leisure facilities should also be better highlighted in order to make the case for large-scale schemes, Cllr John said.
“Sometimes we have not been on the front foot explaining what the opportunities are,” he said. “It is important people are hearing those messages as well as the argument about what housing is being delivered.
“Regeneration is a very long process and making sure you are catching the views of people early on and retaining their confidence throughout the process is the challenge to us.”
Cllr John said the Grenfell Tower fire 12 months ago meant “it is probably not the right time to go out and talk about regenerating estates”. He said the disaster had served as a “wake-up call” to councils in London which have since been working on community cohesion and resilience, while elections had provided an opportunity for “local politicians to reconnect with their voters”.
Many councils in London are continuing to struggle with “massive pressure” on children’s social care budgets due to high demand and costs, Cllr John said.
He called for a joined up approach across local government to call for more funding for children’s services “in the same way we made the case for adult social care” to prevent a looming crisis.
But he added an existing national crisis in child and adolescent mental health services (CAMHS), which is often co-funded by councils and clinical commissioning groups, was feeding into increased pressures on children’s social care and contributing to wider social problems.
“If we invested in CAMHS properly then you would be seeing less fall-out in terms of the acute services but also all the issues that come from disruptive childhood and adolescence,” he said. “In London we are seeing an increase in gang violence. If we invested in CAMHS I don’t think we would be seeing that.”