Local Government Finances: London

Bambos Charalambous Excerpts

Wednesday 26th March 2025 Westminster Hall

[Bambos Charalambous (Southgate and Wood Green) (Lab)]

It is a pleasure to see you in the Chair, Ms Lewell. I congratulate my hon. Friend the Member for Leyton and Wanstead (Mr Bailey) on securing this vital debate and making such an excellent speech. As the Member for Southgate and Wood Green, I have the privilege of representing two boroughs—Enfield and Haringey. Both have faced enormous pressures on their budgets since 2010, when we had the first iteration of the then Government’s austerity agenda. Funding to local councils was slashed, and London councils were particularly badly affected.

Since 2010, Enfield has had £200 million slashed from its budget, a 42% cut. The Institute for Fiscal Studies estimates that Enfield’s share of current local authority funding is the fourth worst in the country relative to comparative need, with a gap of £90 million per year. Like many other outer London boroughs, Enfield suffers from damping, under which the Government calculate the need of outer London boroughs but then take away a proportion and distribute it elsewhere. That is just plain wrong. Enfield needs to get the funding it actually requires to provide services for its residents, but it has lost £11.6 million year on year since 2012-13 as a result of the calculation for outer London boroughs.

Since 2011, Haringey has had its budget cut by £143 million in real terms and has seen a 30% cut in its workforce. It too faces huge pressures on its budgets, particularly in adult social care, in which costs have risen by £31 million, and in children’s social care and SEND provision, where costs have risen by £6 million over the same period.

My hon. Friend the Member for Leyton and Wanstead has already mentioned the antiquated inner-outer London funding formula that adversely affects both Enfield and Haringey and, as is clear from the debate, many other outer London boroughs. The outdated inner-outer London definition needs to be scrapped. Other colleagues have mentioned the huge pressures that London local authorities face in relation to temporary accommodation. Last year, Enfield faced a £17.3 million overspend on temporary accommodation, and for Haringey the figure is £13 million over the last two years.

Despite all that, the councils still provide excellent services. I am proud to put on the record the great work that Haringey Learning Partnership does in the circumstances. What needs to be done? The inner-outer London formula needs to be scrapped, and we need to double the homelessness prevention grant, introduce a funding formula that addresses deprivation, and reform capital flexibility.