www.londoncouncils.gov.uk

Funding outlook for London local government

5 March 2013 Jon Rowney: Head of Fair Funding, Performance & Procurement

www.londoncouncils.gov.uk

“I am keen to move to a radically different system of funding and support for councils that is built on strong incentives, is driven by local decision making and breaks this dependency [on central government grant]…”

Eric Pickles MP – Secretary of State CLG

www.londoncouncils.gov.uk

Strong Incentives

 Business Rates Retention  New Homes Bonus  Localisation of Council Tax Support  Public Health

London Boroughs - Projected income 2010-11 to 2019-20

10,0 9,0 8,0 7,0

£bn

6,0 5,0 4,0 3,0 2,0 1,0 0,0 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 *

www.londoncouncils.gov.uk

Spending Review 2010

 Public Sector expenditure  £81 billion by 2014/15  Local Government core funding  £5.6 billion -19 % in cash terms  -28% in real terms  Further 0.9% reduction in 2015/16 and 2016/17

www.londoncouncils.gov.uk

Reflecting on SR 2010

 Transparent and Comparable?

 Delivery Arm of Central Government  The stretching of the 28% ‘Contribution’  Is it closer to 33%?

The Cut to Local Government

2011-12 2012-13 2013-14 2014-15 0% Total -5% -10% -15% -20% -25% -30% -35%

www.londoncouncils.gov.uk

The changing financial landscape…

www.londoncouncils.gov.uk

‘the local government settlement is built on the principle of fairness, which means councils that deliver for their communities will make more’.

Local Government Minister Brandon Lewis

www.londoncouncils.gov.uk

Local Government Finance: Risk, Reward and Competition Can you build more homes?

Is your local economy thriving? Is unemployment dropping?

New Homes Bonus Grant More local business rates Lower council tax support costs Funding Topslice Less local business rates Higher council tax support costs

Pro-growth services are being cut hardest

110

Environmental

100 90 80 70

Cultural Highways and transport Housing

60 50

Planning and development

2009-10 2010-11 2011-12 2012-13