Despair as Londoners miss out on vital cash

WE need more cash"", say more than 20 of the capital's councils

Susanna Wilkey

"WE need more cash", say more than 20 of the capital's councils.

Front line services could be cut because of a lack of government funding, the councils warned at a meeting on Wednesday.

They say vital cash has been taken away from London and given to the North and the Midlands - and as a result council tax bills could rise by £27.

Westminster Council has joined forces with the other boroughs to fight for a fairer distribution of government cash for local councils.

They are set to sign a joint letter to Prime Minister Gordon Brown highlighting how the latest government finance settlement will severely damage councils' ability to provide quality services for their communities.

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Councils say the settlement means most London authorities now face tough choices between cutting back services or increasing council taxes to meet the needs of residents and reach government targets.

A survey of political leaders and finance experts, conducted by Westminster Council, revealed that 97 per cent of those who responded felt that councils in London were at a disadvantage when compared to councils in the rest of the country.

Finance boss Cllr Colin Barrow said: "The latest settlement penalises the capital when it has the highest levels of unemployment, child poverty and housing overcrowding in the UK.

"The current system fails to take account of London's rapidly growing population and its changing needs - and means that boroughs do not receive the funding they require.

"It seems clear that the cash grant is leaving London and is being redistributed to the Midlands and the North."

The settlement determines how much local authorities will receive in government funding for the next three years.

This money provides around three-quarters of all money that councils spend. The local authorities are going to share their opinions at a seminar organised by the council next week.

Westminster's provisional grant allocation for the 12 months from April increased by only two per cent, leaving a gap of nearly £3.5million compared to current inflation of four per cent.

Cllr Barrow said: "We need a new deal for the capital to provide local services where taxpayers contribute to their local services.

"At the seminar, we were seeking to ensure the government is fully aware of the challenges facing London's councils so that the capital receives its fair share of government funding."

Analysis by London Councils has shown that London has been dealt a serious blow by the government across a number of areas including social care and migration. The government has penalised local authorities with a £420million reduction in funding for social care.

The government has also cut funding for a number of specific grants to London over the next three years, including neighbourhood renewal and adult and child mental health.