London Councils urge funding to be restored to 2010 levels

The cross-party London Councils group has responded to the government’s Spring Statement, which was delivered yesterday (Thursday 27th March 2025) in the House of Commons.

London Councils, in their own Spending Review, urges the government to restore overall council funding to 2010 levels by 2028-29, which would require a real-terms increase of four per cent each year. The cross-party group’s priorities also include protection of funding for demand-led services to meet forecast levels of growth, access to a broader range of funding sources, and investment in the early intervention and prevention services that bring the most benefits over the long term.

Compared to 2010 levels, London boroughs receive around 28 per cent less funding per Londoner, which is only exacerbated with rising costs of living and demand for services like homelessness support and social care. London Councils claim that boroughs will be left struggling with a funding shortfall of at least half a billion pounds in the coming year (2025-26).

On a positive note, London Councils agree that the government’s mission to accelerate housebuilding, particularly affordable housing, is key to tackling London’s worsening homelessness crisis. Currently, around 300,00 potential new homes with planning permission granted by London boroughs have not been built.

Councillor Claire Holland, chair of London Councils, said: “The government is right to prioritise boosting economic growth. Whether it’s building new homes, supporting people into work or attracting investment into our local areas, councils have a critical role to play in this mission. However, the crisis in town hall finances is holding us back.

“Given the tough fiscal outlook, we must continue to focus on investing in prevention and reform of public services so we can deliver better value for money and better outcomes for our communities. Boroughs are committed to this agenda, but we need funding which enables us to make these long-term changes, as well as dealing with then current pressures which have built up over the last 15 years.”