A parliamentary debate on the financial crisis facing London’s boroughs will take place on the same day as the Spring Statement, a move welcomed by London Councils.
The cross-party organisation says tackling the deepening crisis in local authority finances is essential to maintaining services and supporting economic growth across the capital.
The Westminster Hall debate, secured by Calvin Bailey MP (Leyton and Wanstead), will allow MPs to highlight the severe budget pressures affecting London’s boroughs. Over a decade of chronic underfunding, coupled with rising costs and soaring demand for services like homelessness support and adult social care, has pushed councils to the brink. Since 2010, boroughs have seen a 28% drop in per-person funding, and face a funding gap of at least £500 million in 2025-26.
Seven London boroughs will receive Exceptional Financial Support from the government this year, totalling £418 million – nearly a third of the national £1.3 billion support package. However, London Councils warns that these emergency loans add more debt and won’t solve the long-term financial instability.
Council leaders are urging the government to use the upcoming Spending Review to deliver sustainable investment. They stress that funding stability would allow boroughs to prioritise early intervention and prevention, reducing long-term demand on services and supporting efforts like affordable housebuilding and local economic growth.
Cllr Claire Holland, Chair of London Councils, said:
“The worsening crisis engulfing boroughs’ finances has worrying implications for local services and the capital’s growth prospects.
“The combination of years of structural underfunding, fast-rising demand for services such as homelessness and social care, and spiralling costs has pushed boroughs to the brink of bankruptcy.
“We know MPs share our concerns and want better funding solutions. Boroughs are as determined as ever to work with the government on our shared priorities, including more focus on prevention, delivering affordable housing, and boosting economic growth. Restoring stability to our budgets and local services is key to achieving this.”
London Councils is calling for overall council funding to return to 2010 levels by 2028-29, which would require annual real-terms increases of 4%. Their priorities also include safeguarding budgets for high-demand services, diversifying funding sources, and investing in long-term prevention strategies.
You can read their full Spending Review submission here. Photo by Yair Haklai, Wikimedia commons.