London borough spending has fallen by more than a quarter over the past five years, and is set to fall even further after the chancellor's imminent Spending Review.
A new report from Centre for London shows spending by boroughs has been reduced 14% per head, according to government statistics, a figure which could rise to 28% in real terms. Spending cuts have been highest in central London boroughs like Camden, Tower Hamlets and Westminster.
According to the report, planning and development departments have been hit hardest — expenditure has fallen by 60% across London, with boroughs in the east (where most of the new housing is expected to be built) being worst affected.
Spending on social services has fallen by around 9% per head, while highways and transport spending has been maintained, due to income from car parking and other charges rising by £100m over five years.
Centre for London’s analysis suggests that boroughs have coped with cuts through seeking efficiency savings and working together better, through reducing discretionary services to focus on essential services for those in most need, and through increasing income from fees and charges where they can. But it questions whether these approaches will continue to bear fruit if the next phase of cuts is as severe.
Richard Brown, research director at Centre for London, said:
"London’s local authorities have shown resilience and ingenuity in absorbing 44% real terms funding reductions over the past five years with only a modest impact on front-line services. But running down services like planning, environmental services and cultural services to protect services to the most vulnerable cannot be repeated indefinitely."
However, this is not the end of it. As Brown warns, "the next round of cuts could be as tough if not tougher". On Wednesday, George Osborne will set out spending plans for this parliament (i.e., until 2020). London Councils has, separately to Centre for London, raised concerns that expected funding reductions will affect boroughs again. Culture, arts and leisure could be particularly badly affected.
There are already plans to reduce library services in Lewisham and Lambeth, and London Councils has previously warned that parks could end up being privatised. Hackney councillor Guy Nicholson, who represents London Councils on the Mayor's Cultural Strategy Group, said
"The role of culture and the arts in our local areas should not be underestimated; they are the vital catalyst for creating thriving, cohesive and prosperous communities. According to 60% of Londoners, arts and culture is the best thing about living in the capital. GVA (gross value added) of the creative industries in London was estimated at £34.6bn, accounting for just under half of the UK total, and contributed 10.7% of total GVA in London."