Many investment projects are at risk as the London Development Agency is set to lose around 90% of its budget, it was announced yesterday. Last week's CSR confirmed the LDA would be scrapped by 2012 and its activities folded into the GLA, with the Mayor expecting about a 30% cut in funding. But now the government will only commit £56m of its £480m budget, with no indication if they'll cough up with any more.
The LDA does a huge amount for London: promoting the capital abroad as a place for tourism and foreign investment, supporting the city's businesses, helping cut carbon emissions and regenerating parks and urban spaces. Cutting off funding will affect employment projects, schemes to reduce youth violence, support for at-risk young people and a lot of the Olympic legacy programmes. 200 jobs within the agency will go before April; how many other jobs outside the LDA will go as a result of lack of investment is yet to be calculated.
Will Boris Johnson be able to claw any of the funding back? We're not sure: after he enraged the government by using the highly charged, and somewhat stupid, phrase 'Kosovo style social cleansing' about housing benefit, the Mayor's stock is pretty low in Whitehall and his negotiating position is sure to be weakened. But he needs to fight tooth and nail over this. Axeing investment and regeneration programmes during a time of economic difficulty is astonishingly short-termist and will harm, rather than help, London.