Labour’s budget, which includes an extra £1.3billion for local governments, has been met with caution by some council leaders, with Redbridge leader Kam Rai expressing concern it may not go far enough, reports Sebastian Mann, Local Democracy Reporter
East London councils have had cautious responses to yesterday’s Budget, which includes an extra £1.3billion for local governments.
Labour’s first Budget since 2010 saw Chancellor of the Exchequer Rachel Reeves announce a record £40bn tax rise.
At the despatch box, Reeves vowed to “fix the foundations” of the economy and public services like the NHS.
The promise of £1.3bn to local governments included £600m for social care and £230m to be spent on tackling homelessness.
If the money was distributed evenly across the 317 local authorities in the country, it would equate to around £4m each.
Grace Williams, the leader of Waltham Forest Council, said the Budget was a “stark reminder of the challenges the country faces”.
She added that, although the the “clearly unsustainable structural funding pressures facing local government” remained, she welcomed the government’s “interventions”.
She said in a statement: “These are invaluable measures which will help to sustain our services, and positive signals that the new chancellor is listening to local government.
“However, the fact remains there will still be a significant shortfall in the amount of money ultimately needed to tackle the rising pressures we are facing, from temporary accommodation to social care.”
The Labour group leader described it as the first step in “rebuilding” the country, adding: “I am particularly pleased that there will be extra money for the social housing, schools and the NHS that desperately need investment locally.”
Councillor Ray Morgon, leader of Havering Council since 2022, told the Local Democracy Reporting Service (LDRS): “We still don’t know what this means to us without seeing the details, including how it is distributed around the country, although the government has said that they are reviewing that too.
“So it could be good news for us, but we are still looking at a budget gap of over £30m due to the costs of social care and homelessness that we must deliver by law.”
The Havering Residents Association leader said the council will “no doubt” need to borrow more money from the government next year.
In February this year, Havering accepted a £54.5m loan from central government after finding itself on the edge of effective bankruptcy.
Cllr Morgon added the council would continue to lobby the government to “create a fairer funding formula” based on need rather than “the postcode lottery which we have endured for many years”.
Kam Rai, the Labour leader of Redbridge Council, said the extra £1.3bn was “welcome” but may not cover the council’s current pressures.
He said on X: “The £1.3bn announced for local government is welcome but less than the pressures accumulated after 14 years of austerity.
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“I’ll be looking at the detail, but it must be distributed on a fairer funding basis and not the outdated and failed formulas used by the Tories.”
He said earlier: “Local government is an emergency service for many, yet no other area has endured our level of cuts since 2010. We need fairer funding.”
According to the Local Government Association (LGA), the Budget included “some positive measures we have called for “including Right to Buy reform and funding for potholes, childcare, and affordable housing.”
This will help councils “support early years, repair roads, and build new and improve existing homes”.
It will also mean an extension to the Household Support Fund next year, which councils use to provide welfare support for vulnerable households.
LGA chair Louise Gittins said “fundamental reform” was still needed.
She said: “This is a step in the right direction, but councils and the services they provide to their residents still face a precarious short- and long-term future.
“The government needs to give explicit clarity on whether councils will be protected from extra cost pressures from the increases to employer national insurance contributions.
“Only with greater funding certainty through multi-year settlements and more clarity on financial reform, can councils protect services, meet the needs of residents and work in partnership on the government’s priorities, from social care to housing, inclusive economic growth and tackling climate change.”
Meanwhile Waltham Forest Conservative Party leader Emma Best said her party needed to “rebuild trust” with voters and win the next election in 2029.
She said on X: “The nation at large never wanted Labour, they never wanted this Budget.
“They wanted rid of us because we lost their trust and today shows why it’s critical we rebuild that trust and make this a one-term government.”
Speaking in parliament yesterday, Reeves began her maiden Budget speech with an attack on the Tories’ record on austerity and Brexit.
She told the Commons “we cannot undo 14 years of damage in one Budget,” and that “economic growth is our mission” for the next five years.
Former Prime Minister and Chancellor Rishi Sunak accused Labour of “taxing, borrowing and spending far beyond” what they had promised in the run-up to the election.
Despite forming a new parliament with a majority of 174 seats, Labour won just 33.7% of the popular vote, with electoral reform groups calling it the least proportional general election in UK history.
Elsewhere in the capital, Reeves committed to extending the high-speed railway HS2 to Euston Station and boosting funding for Transport for London.
Editor’s note: (01/11) This article has been updated with comment from Waltham Forest Council leader Grace Williams and a statement from the Local Government Association
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