Major changes proposed in Mayor’s first budget

The Mayor of London has moved to raise council tax for the first time in nine years, to address a gap in funding for the Metropolitan Police (Met) - and there are a number of other holes to fill.

That’s the verdict of the London Assembly Budget and Performance Committee which today set out the key issues facing the Met, Transport for London (TfL) and more, ahead of the Mayor’s draft 2017-18 budget. The ‘Pre-Budget Report’ sounds the warning bell on a number of issues:

• The Mayor is proposing to increase the police precept element of council tax bills by 1.99 per cent, adding £4.02 to the average Band D property. Government funding for the Met is due to fall by £17.4 million compared to 2015-16.
• TfL plans to hugely increase its borrowing to finance its business plan. By 2020-2021, its level of debt will grow to more than £12 billion and interest costs will increase by over 50 per cent.
• Fares income could be less than expected unless TfL solves the problem of London’s congested roads.
• The London Legacy Development Corporation (LLDC) continues to make operating losses, and the cost of the London Stadium has increased by another £51 million this year.
• The Mayoral Development Corporations continue to underperform and they remain a significant risk for the Mayor. Regeneration opportunities are under threat – in part because of a lack of leadership – the Chairman of the LLDC resigned in November and the Chair of the Old Oak and Park Royal Development Corporation (OPDC) resigned in May.
• London’s share of the Growth Deal 3 funding is not enough to support the Mayor’s planned regeneration and economic development projects.

Gareth Bacon AM, Chairman of the Budget and Performance Committee said:

“The Mayor has decided to increase council tax next year to help fund the Met Police. He will have to explain to the Assembly – and to Londoners – why this is the best way of dealing with the cut in Government funding announced last week.

We also have concerns over TfL’s fares income, which could be less than expected. So far, there are no affordable housebuilding targets, and it is now being proposed that the Met’s performance measures should be set at the borough, not London, level.

That aside, some issues with this year’s budget process need to be addressed, including a significant lack of transparency and the absence of any proposed performance measures. It’s important the Mayor ensures that high standards of transparency are introduced and improved throughout his term in office.”