Following the government's Spring Statement, London Councils – the cross-party group representing the capital’s boroughs – has called for significant investment in local services as part of the

upcoming Spending Review.

After over a decade of underfunding and financial instability, the group urges the government to restore adequate funding levels for existing services and invest in preventative initiatives that can reduce long-term demand.

The boroughs back the government's housing ambitions, highlighting that increasing the supply of new homes is essential to tackling London’s growing homelessness crisis. Despite planning approval for around 300,000 new homes, rising construction costs and limited infrastructure and affordable housing funding are stalling progress.

Cllr Claire Holland, Chair of London Councils, said: 

“The government is right to prioritise boosting economic growth. Whether it’s building new homes, supporting people into work or attracting investment into our local areas, councils have a critical role to play in this mission. However, the crisis in town hall finances is holding us back. 

“It’s vital the upcoming Spending Review and planned reform of council funding deliver the investment and financial sustainability boroughs need to drive growth in the capital and across the country. Without this, we risk more and more boroughs entering effective bankruptcy – a situation which would undermine economic confidence, hold back growth, and cost the public purse more in the long run.

“Given the tough fiscal outlook, we must continue to focus on investing in prevention and reform of public services so we can deliver better value for money and better outcomes for our communities. Boroughs are committed to this agenda, but we need funding which enables us to make these long-term changes, as well as dealing with the current pressures which have built up over the last 15 years.”

Key demands in the group’s Spending Review submission include:

- Restoring council funding to 2010 levels by 2028-29, through annual real-terms increases of 4%.

- Safeguarding budgets for demand-driven services to match population growth.

- Broadening funding sources for councils.

- Boosting investment in early intervention and prevention services.

London boroughs currently receive 28% less funding per resident than in 2010. With demand for services like homelessness support and social care soaring, councils are facing a projected funding gap of at least £500 million in 2025-26.

You can read London Councils’ full Spending Review representation here.

Photo by Lewis Clarke / London : City of London - Council Office & Cityscape /