Housing crisis “threatens to break borough budgets”
A housing crisis and homelessness pressures pose the “fastest-growing risk” to boroughs and are “wreaking havoc” on town hall finances in the capital, London Councils has warned. Skyrocketing numbers of homeless Londoners requiring temporary accommodation and the worsening state of social housing budgets threaten the overall stability of borough finances – with several local authorities in the capital edging closer towards effective bankruptcy.
London Councils forecasts boroughs will face a collective budget shortfall (across all services, not just housing and homelessness) of at least £700m next year unless the government provides more funding support.
Making its submission to the Treasury ahead of the Budget on 30th October – where the Chancellor will also set out her Spending Review decisions for 2025/26 – London Councils’ top priority is to stabilise local government funding.
The cross-party group says shoring up borough finances is critical for boosting their ability to help tackle the housing crisis, drive economic growth, and invest in the preventative services that bring long-term benefits to Londoners.
“The housing crisis is having a devastating impact on Londoners’ lives and wreaking havoc on town hall finances across the capital,” Cllr Claire Holland, Chair of London Councils, said. “Housing and homelessness pressures are the fastest-growing risk to London borough finances. At a time when we need to invest in social housing and support homeless Londoners, boroughs are facing an unrelenting squeeze on our resources. The unavoidable reality is that spiralling costs and years of underfunding threaten to break boroughs’ budgets.
“The current outlook is bleak, but we are committed to working with the government to find a better way forward. The upcoming Budget is a crucial chance for the government to restore much-needed stability to council finances and the local services we provide. This will enable boroughs to play our part in tackling the capital’s housing crisis and driving economic growth in London and across the country.”
