London - 5 key takeaways from the Spending Review
It is no secret that the mayor of London was not pleased with what was - or rather, what was not - in the government's recent Spending Review.Sadiq Khan's wish list, including money for new transport infrastructure projects, was surrounded by tumbleweed. An increase in police funding - unlikely to fill the Met's budget black hole - offered cold comfort, and there were slim pickings for council finances.The government would disagree with his outlook, pointing to investment in affordable homes, free school meals and the NHS.So let's take a closer look at the offerings for the capital.
TransportTransport for London (TfL) is getting a four-year spending settlement of £2.2bn.It's a big deal because in recent years, not knowing how much government funding it would be getting beyond the next year TfL has struggled to plan ahead.TfL commissioner Andy Lord said having four years of cash guaranteed meant TfL could now complete the introduction of new trains on the Piccadilly line and Docklands Light Railway (DLR), and new signalling on 40% of the Tube.He said it can now procure a new tram fleet, progress discussions on new Bakerloo line trains and can get to work on renewing some of London's critical roads, tunnels and flyovers.
InfrastructureIn bad news for City Hall, no cash was allocated for the new transport infrastructure projects Sir Sadiq had been pinning his hopes on.These included the DLR extension to Thamesmead, the Bakerloo line extension to Lewisham and the West London Orbital between Hendon and Hounslow.This spending review was about the government's priorities and it was clear new London-based transport projects were not on that priority list.Instead, it pointed at old infrastructure announcements we already knew about -Heathrow expansion and HS2 to Euston.I asked the mayor's team whether it was an anti-London spending review. The answer was unequivocal: "Yes it is".However, an olive branch to City Hall was offered in a Treasury document, which said "the potential growth and housing benefits" of the DLR extension was recognised, and that the government "is committed to working with TfL to explore options for delivery".Sir Sadiq, who spent the run-up to last year's General Election telling journalists a Labour government working with a Labour mayor would mean London would get what it needs, was clearly not pleased.In the statement, he said it was "disappointing" there was no commitment to invest in the new infrastructure.He warned that without such investment, it will be unable to build "the new affordable homes that Londoners need".
HousingThe good news on housing was the £39bn for affordable homes over 10 years, which has been welcomed by the G15 group of the capital's leading housing associations. Chair, Ian McDermott - who is also the chief executive of the Peabody housing association - said it was clear ministers understood the issues."In London the challenge remains considerable, but this settlement offers a real opportunity to turn the tide."Antonia Jennings, chief executive at the Centre for London thinktank, agreed it will bring more certainty to home builders, although did specify "the devil is in the detail".That brings us to the not-so-pretty side of this £39bn funding - we do not yet know what proportion of the funding will actually come to London.Ms Jennings warned a 10-year plan does not help Londoners today who are struggling to find affordable homes. She added that it would have been "very helpful to see… an uplift to the Local Housing Allowance" to help private renters.The Spending Review did include £950m to help councils pay for what the government described as "good-quality temporary accommodation" instead of "costly bed-and-breakfasts and hotels". London's boroughs have welcomed that, but again, it is not clear how much will come to London. London's councils now collectively spend £4 million a day on temporary accommodation to house homeless Londoners, and it is unclear if this sum would make much of a dent in that.
PolicingYes, the chancellor did announce an increase of 2.3% for policing, but - and it is a huge but - the Metropolitan Police is facing a black hole in its funding of £260m this year.Commissioner, Sir Mark Rowley, warned of potential cuts to officer numbers and said they might be forced to choose which crimes the Met can afford to focus on.So is a 2.3% increase enough? The mayor of London thinks not. The statement he issued to us read: "I remain concerned that this Spending Review could result in insufficient funding for the Met and fewer police officers."In response, the chancellor Rachel Reeves told the BBC: "I really don't accept that there need to be cuts when we're increasing the money the police force gets."Clearly all is not harmonious between London's Labour mayor and the Labour government on this issue.
Local governmentPut simply, London boroughs wanted more. The Treasury did announced an increase of around 3.1% per year in local authority core spending power, but London Councils has been warning it expects a collective funding gap of £500m this year.Chair of the group, Claire Holland, who also leads Lambeth Council, said boroughs' finances remain "extremely difficult" and the funding "will remain very tight."She said the critical issue going forward would be whether the government includes the cost of housing in how it decides the funding formula that determines the proportion of money each council receives.Pointing to research from the Institute for Fiscal Studies that suggested London local government funding was 17% lower than its relative need, Holland said the distribution of funds "can be make or break for us in London". She added it was "vital" a new funding formula is implemented, that matches resource to need.Then there is council tax. Treasury documents for the spending review suggest council tax is expected to rise by 5% a year to pay for local services and that bills are also expected to rise further to pay for an increase in police funding. In London that has already been happening for years. Most councils here raised their council tax by the maximum 5% allowed this year and the mayor has, for several years, raised the council tax precept (the amount the Greater London Authority adds to your council tax bill) to provide more funding for the Met Police. Londoners can probably expect that trend to continue.From next year London will get an integrated settlement, bringing it in line with how funding works for combined authorities in some other parts of the country.So instead of the Greater London Authority getting different pots of cash from central government for, for example, housing or policing, which has to be spent on those areas, the mayor will get one budget pot and the GLA will decide how to spend it.
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