What Is City Hall Spending Its Money On This Year?

Rachel Holdsworth
By Rachel Holdsworth Last edited 80 months ago
What Is City Hall Spending Its Money On This Year?
Photo by Lee from the Londonist Flickr pool

Transport, fire, police, housing and council tax: London's budget for the next financial year gets debated next week at City Hall. It's unlikely that anything will change — Boris Johnson has the numbers he needs on the London Assembly to get it all signed off — so we've taken a look at what it means for us.

Council tax

Your council tax is going to go down a bit, but that's largely down to the ending of the Olympic precept (the cash we've been paying for 10 years for the 2012 Games). That was the equivalent of £19 per band D property that's been sitting on your council tax since 2006, and now it's done with. You'll probably see some rows in the press about whether this means Boris Johnson is being wholly honest when he says he's kept his manifesto promise to cut the mayor's share of council tax by 10%; the main thing is that your tax is going down a tiny bit and it's not for nasty, political cost-cutting reasons.

The London Assembly's Budget Committee points out that the cut will lose the Greater London Authority around £50m a year, and limits on raising the precept again mean it'd be 10 years before council tax could be back at current levels. Tessa Jowell, in her campaign to be Labour's mayoral candidate, suggested keeping the Olympic precept and putting the money into Sure Start. But, this has been planned for years. We've paid for the Olympics now; here's your money back.


By 2018-19, Transport for London won't receive any money from the government to help with day-to-day operations. That's £2.8bn less than it had forecast for between now and 2021 — not great when TfL is also £1bn behind on its sub surface upgrades. TfL is still working out what the impact of this will be. It hopes there'll be no need to cut or delay upgrade programmes or new projects, but we'll need to wait and see.


The government has protected spending on policing until the end of the 2019-2020 financial year so immediate fears over the future of, say, neighbourhood policing, can be put to rest. In the medium term, there are still worries that officers will have to fill in if/when back office admin roles are cut to save money.

That's because the Metropolitan Police Service still has budget pressures: £47m for a pension scheme, and something as simple as inflation adds £25m to costs. The Met is expected to make savings of between £31m and £36m each year between now and 2018-19. Exactly where those savings will be found is still to be made clear.

Some of these savings could come from an outsourcing contract with Shared Services Connected Limited. It's estimated the contract will save £106m over seven to 10 years; however, it turns out that the Department of Business, Innovation and Skills recently ended a similar contract with the same company, citing lack of viability.


The London Fire and Emergency Planning Authority (LFEPA), which oversees the London Fire Brigade, has a budget gap of £6.4m. We've already discussed the mayor and commissioner's preferred option, which is to permanently cut the 13 fire engines that have been out of action since August 2013, in reserve in case of strikes. The majority of LFEPA members would rather another option was found, but this looks highly unlikely.


Highlighting once again the difficulty of building new housing in London, £147m of the £200m London Housing Bank budget is currently unallocated. There's also £295m unallocated as part of the mayor's housing covenant, around two-thirds of which now looks like it will be funnelled towards 10 new housing zones.

Last Updated 20 January 2016

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