By Patrick Harrington and Rosie Harris-Davison
Hard-pressed London boroughs are said to be “teetering on the edge” after the Autumn Statement failed to address local council budgets.
Headline announcements in Chancellor Jeremy Hunt’s Wednesday afternoon statement included slashing National Insurance, tighter rules on benefits and a higher national living wage.
Claire Holland, Acting Chair of London Councils, said: “Boroughs will continue to face massive budget pressures. Many are struggling to balance their budgets and the Autumn Statement leaves them teetering on the edge.”
Eastlondonlines reporters took to the streets to see what the public thought about the incoming changes and here take a closer look at how the Statement will affect our boroughs.
Council Budget
The paperwork supporting the Autumn Statement does not include any direct additional funding for local councils.
In 2023, Lewisham and Hackney had to increase council tax to the maximum of five percent to fulfil their legal duty to balance the budget, while Croydon Council is £1.6 billion in debt. This year the council had to be granted special permission to raise council tax by 15%.
Worse still for Croydon, Bank of England Governor, Andrew Bailey, said on Wednesday it is: “far too early to be thinking about rate cuts” so Croydon’s debt will continue to grow at the 5.25% interest rate.
Graeme McDonald, Managing Director of Solace, a local government members network, warned: “nothing the chancellor announced today will change the bigger picture for councils right now. And the projected spending figures for next year onwards are horrifying.”
According to the Local Government Association, councils in England face a four-billion-pound funding gap over the next two years.
Shaun Davies, chair of the LGA, also expressed disappointment that the Autumn Statement: “failed to provide funding needed to protect the services the people in our communities rely on every day.”
Lewisham Council told ELL: “We need time to interrogate the budget and what it means for our financial situation, but like most local authorities in the country, there are financial challenges”.
Benefits
Hunt cracked down on benefits rules by introducing mandatory work placements for the long-term unemployed. Failure to engage within six months will cease the benefits.
Tory MP for Croydon South Chris Philp said: “Working age benefits cost around £180 billion a year […] so it is reasonable that there is some conditionality and incentive to get into work.”
It is not clear that this figure is correct. The government’s DWP annual report for 2022 to 2023 estimated expenditure on working-age benefits was £95 billion.
All four ELL boroughs are amongst the ten boroughs with the highest proportion of people on benefits.
Hackney has the second highest proportion of people on out-of-work benefits in London, with 16% of adults receiving the handout at the end of Q1 this year.
Hunt also announced that next year universal credit would rise in line with September’s inflation figure of 6.7%.
Because inflation is falling quickly, and is expected to continue to fall, this will represent a significant real terms boost to benefits.
So, for those on benefits, the regular payments will have more purchasing power from April 1, 2024, but there will be a higher burden of proof to show that work is actively being sought.
Newly elected Hackney mayor Caroline Woodley reassured residents that the council would be there to support them: “Our Money Hub service continues to help residents maximise their income and claim the benefits to which they are entitled.”
Planning
One announcement on planning may prove a double-edged sword for borough councils.
Councils will be able to recover the full costs of major business planning applications but they will have to meet faster deadlines.
Failure to meet the deadlines will mean the fees are refunded and the applications processed free of charge. Hunt said this will provide: “a prompt service or your money back – just as would be the case in the private sector”.
ELL has contacted the chairs of the planning committees for all four councils but received no response to date.
Local Housing Allowance
In his statement, Hunt also announced that the Local Housing Allowance will increase to the 30th percentile, a response to growing pressure to reverse the freeze on LHA that was due to last until 2024.
LHA is used to calculate how much people renting from private landlords can claim in Housing Benefit or Universal Credit.
Woodley said the developments were: “a huge victory for councils, campaigners and – most importantly – thousands of private renters in Hackney and across the country”.
Holland said: “After years of campaigning for an increase in Local Housing Allowance, we welcome the decision to end the freeze. Boosting LHA is essential for helping low-income Londoners pay their rent and avoid homelessness. This is good news for London renters and for boroughs’ hard-pressed homelessness services.”
Mental Health
Prior to The Autumn Statement, Hackney Mayor Caroline Woodley called for suicide prevention funding to be reinstated in the UK.
The letter, addressed to Jeremy Hunt, Chancellor of the Exchequer, was co-written by Woodley, Hackney Councillor Chris Kennedy, and Councillor Claudia Tubet-Delof.
The letter detailed that: “as a borough, Hackney recognises good mental health as a Human Right.”
It also detailed that the funding for The NHS North East London ICS funding, which provides training in suicide prevention in Hackney, will run out in March 2023.
However, The Autumn Statement did not reinstate suicide prevention funding.
Tubet-Delof, Hackney’s ‘Mental Health Champion’ told ELL she is: “Not surprised [by the Autumn Statement], but absolutely determined, and certain that we as Labour local administration are taking the humane steps to support everyone’s mental health, and will continue to work campaigning and delivering services that ensure we reduce suicide to zero.”
Many other organisations and statutory bodies feel that the Government is not prioritising the nation’s mental health and are disappointed at the result of the statement.
Julie Bentley, Samaritans Managing Director, said in their message to Mr Hunt: “Millions of pounds have been invested in reducing smoking rates because it saves lives, and cutting suicide rates should be no different.”
Further reaction on X (Twitter)
