By Sophia Corness-Parr and Ed Holt

The Autumn Statement left London councils in a state of deep “uncertainty” after Jeremy Hunt spoke of cutting their budgets by 10 per cent, adding to pre-existing £700m borough-wide spending cuts.

Eastlondonlines attended recent council meetings in Croydon and Lewisham to understand their current financial states, which will likely become worse in the coming years as a result of Hunt’s announcement.

Lewisham

On the same day as the Autumn Statement, a Lewisham council meeting discussed £10.826m worth of cuts to their annual budget, laid out in a draft report. The report was written before the Autumn Statement.

The report said: “Even if all of the available measures are agreed as part of the budget, including applying the anticipated maximum council tax increases, this would still leave a budget gap for 2023/24 of £2.662m.” 

Councillor Stephen Penfold said: “We have less money now than we’ve ever had before so we are going to have to make some difficult decisions.”

Katherine Nibb, Head of Financial Strategy, Planning and Commercial said inflation was “one of the key and most consistent pressures all services are facing along with the cost of living crisis” and the council’s proposals ask “all services to look for efficiencies.” 

The Autumn Statement increased the legal maximum council tax spend for London authorities from two point nine nine per cent to five per cent.

But London Councils calculated that even if boroughs were to adopt this new maximum, it could still only close the budget gap by £80m across the city. 

Speaking on the Chancellor’s statement, Nibb said: “Although we have had some confirmation through [Hunt’s] announcements, it still raised quite a lot of uncertainty around local government funding.”

Lewisham Council, along with all other local authorities, are reliant on the Local Government Finance Settlement to understand how its budget will be affected by Government allocation of funds which are expected in December.

Nibb said: “In July 2022, when the mid term financial strategy came out, that signalled that we would need 14 million pounds of cuts over the next four years.”

That figure is set only to increase after Hunt’s announcement yesterday.

Croydon

At a council meeting one day before the Autumn Statement, Croydon Mayor Jason Perry laid out his four-year business plan.

Finance minister Jason Cummings said about this plan: “We have to spend less, and we will be able to do less, this is the stark reality we face.”

Cummings said Croydon’s financial woes are “unparalleled in local government” in response to the fresh spending cuts.

The business plan is the culmination of the ongoing problems afflicting Croydon Council since November 2020; when a £1.5bn hole was uncovered in its finances and it declared itself bankrupt.  

Labour were in charge of the council during this time, but they subsequently lost control to the Conservatives in this year’s local elections.

The current Leader of the Opposition, Stuart King, criticised the plan. He said it lacked of references to the cost of living crisis and the “unacceptable” levels of inequality in Croydon. King asked: “Was it a conscious decision?” 

He also challenged Perry about previously announced cuts to the community sector. Perry responded: “My priority is fixing the mess you [Labour] created, the bankruptcy you created”.

He then accused King of shedding “crocodile tears” and reiterated his belief that “you broke this council’s funding for generations”.