However, the city council outlined how the money still fails to cover the costs of managing central London and highlighted that, of 13 inner London boroughs, Westminster receives the third lowest increase in grant from 2003-4 to 2004-5.
Kit Malthouse, deputy leader, said: 'We are pleased that the government has found this extra cash for local authorities, which suggests they are determined to avoid the school funding crisis and nightmarish council tax increases of last year.
'Unfortunately the funding for Westminster will not be enough to meet the costs we face as a result of our privileged position at the heart of London. The new licensing laws alone are set to cost us £2.7m; we are expected to pass £5.5m to schools and pay and price inflation will wipe out at least another £9m.
'We will receive £9m extra grant, less than the increase given to ten of the other twelve inner-London boroughs, but our costs will have rocketed by nearly £17m. All the extra money is effectively spent before we get it.
'Until we sort out our Census dispute with the ONS and have our population adjusted, we will continue to receive the minimum increase in grant and our front-line services, from community safety to social services, will continue to feel the pinch.'