TfL will receive its "largest multi-year settlement in over a decade", Rachel Reeves has said as she faces a growing row with City Hall over deteriorating funding for the Metropolitan Police and infrastructure projects.
London’s transport network will get £2.2bn over the next four years for its capital renewals programme, the Chancellor confirmed in her Spending Review on Wednesday.
The Treasury also revealed that £25.3bn would be provided to help deliver HS2 from Birmingham Curzon Street to London Euston.
However, Sir Sadiq Khan said he was “concerned” that Britain’s largest police force could be left with fewer officers because of squeezed budgets.
While the Chancellor said the force would get an average spending power increase of 2.3% per year under her plans, the wider Home Office budget is due to fall, official Government documents show. A warning of a council tax “bombshell” has also been issued to fund the plans.
The Mayor of London also expressed his disappointment that the Treasury had refused to commit cash to infrastructure schemes, such as the DLR and Bakerloo Line extensions.
Ms Reeves said: “This government takes seriously its commitment to investment, jobs and growth in every part of the UK. And I have heard the concerns of [MPs] and the mayor of Liverpool City Region, that past governments have underinvested in towns and cities outside London and the South East. They are right.”
Following the speech, Sir Sadiq warned that “the way to level up other regions will never be to level down London”.
“I've been determined to stand up for London and it’s good news that we have won extra resources for transport and housing,” he said. I have been campaigning for years for a multi-year deal for City Hall and for Transport for London and I welcome this agreement.
“However, I remain concerned that this Spending Review could result in insufficient funding for the Met and fewer police officers. It’s also disappointing that there is no commitment today from the Treasury to invest in the new infrastructure London needs.
“Projects such as extending the Docklands Light Railway not only deliver economic growth across the country, but also tens of thousands of new affordable homes and jobs for Londoners. Unless the government invests in infrastructure like this in our capital, we will not be able to build the numbers of new affordable homes Londoners need.”
Responding to the criticism, Ms Reeves insisted that the spending power of the Met police would increase in real terms and that the capital would also benefit from the record £39bn earmarked to build affordable homes across Britain.
She added: “This is a good budget for London, but most importantly it is a good Spending Review for the whole of the United Kingdom.”
BusinessLDN, which represents company leaders in the capital, said the city had been “shortchanged”.
Chief Executive John Dickie, said: “The acid test for this Spending Review is whether the Government’s rhetoric on growth is matched with the investment needed to kickstart the economy. “The Chancellor has delivered some welcome additional spending on infrastructure, transport and skills.
“But it looks like London has been left short-changed.
“The Government’s growth mission can only be achieved by unlocking the full potential of London. As a UK-wide engine of growth, the capital accounts for a quarter of the country’s economy.
“Its substantial net contribution to the public coffers rightly supports spending in other parts of the country but must also enable London to grow.
“While the certainty provided by a four-year funding deal for Transport for London is welcome, the lack of certainty around delivering shovel-ready projects like the DLR to Thamesmead and Bakerloo line extension that could accelerate growth, create new jobs and open up sites for tens of thousands of new homes is baffling.”
Councils were also left disappointed. Half of London boroughs are at risk bankruptcy over insufficient schools funding for children with special educational needs and disabilities (SEND), it has been warned.
Sixteen of the capitals 33 local authorities have said they face “severe budget deficits” totalling £500million next year over the crisis, according to analysis from cross-party group London Councils.
The government said it wants to make the education “system more inclusive” and “will reform the current Special Educational Needs and Disabilities (SEND) system”.
But details on supporting local authorities will not be laid out until the Autumn.
Boroughs welcomed the cash for house building and additional investment for children’s social care and temporary accommodation, saying this will help them invest in prevention.
However, London Councils warned the modest overall increase to local authority funding means boroughs’ budgets still face an “extremely difficult” outlook and “serious risks” to financial stability.
Claire Holland, Chair of London Councils, said: “Increased investment in affordable housing is hugely welcome and critical for tackling the capital’s housing crisis. This is a potential gamechanger in our efforts to accelerate housebuilding and it’s vital that London gets its fair share of this funding.
“However, the outlook for boroughs is still extremely difficult and there remain serious risks to our financial stability. More than a decade of structural underfunding, fast-rising demand for services and spiralling costs have pushed council budgets in London to the brink.
“The upcoming reforms to local government funding are now ‘make or break’ for London boroughs. The resources we receive must match the high levels of need, deprivation and cost of delivering services in the capital.”
