Blog Post

What London needs from the Autumn Budget

With the Chancellor due to announce the Autumn Budget, our Director of External Affairs Jo Corfield outlines the key priorities he must give attention to in the capital for it to recover and thrive.

This is an important week for the Treasury as the Chancellor gears up for the long-delayed spending review and autumn budget. With big pressures on the cost of living, fears of energy shortages and some fearing inflation might hit 5 per cent by the end of the year, people are looking to the government for a clear commitment to helping the country through what is set to be a very tough winter.

So what does London need from this week’s budget? Here’s our list of priorities for the Chancellor…

Levelling up

Contrary to what many outside of the city think, London suffers from some of the worst deprivation and inequality in the country. Yet only two of London’s 32 boroughs (Newham and Barking & Dagenham) are included in the priority tier of local authorities eligible for the new £4.8 billion Levelling Up Fund. (Many more examples of where London has been excluded can be found in OnLondon’s Levelling Down Monitor). The Chancellor has an opportunity to reform discretionary central budgets that unfairly discriminate against places which need urgent government support. Levelling up the country – a laudable aim and one which Londoners support – must not mean ignoring the city’s own substantial challenges of inequality or that London is levelled down.

Michael Gove indicated in his speech at the Conservative Party Conference that access to opportunity is a key aim of levelling up. In London’s case, the barriers to opportunity are not always due to geography; Canary Wharf’s towers shadow over communities in east London that suffer from deep poverty,  clearly illustrating that something far less tangible is at play. For levelling up to succeed here, it will need a much more joined up approach that recognises investment in skills, education, early years, housing and health. To achieve this, London – as well as other metro regions, towns and cities – need more power to address their specific, local and inter-connected challenges. The government should, for example, devolve the further education budget in full to London government, including funding for apprenticeships and 16-18 learning. This would mean that London could make proper joined up decisions about what Londoners and the city’s job market needs, rather than this being dictated by the government.

Reflect the cost of living in the capital

There’s some speculation the Chancellor will confirm a big rise in the minimum wage for those aged 23 and over – some suggesting it could rise by 5.7% to £9.42 an hour. Because of the high costs of living in the capital, the London Living Wage rate is £10.85 per hour, so even with the speculated increases in the Minimum Wage, Londoners on low salaries are left earning below what is needed in order to afford the basic minimum necessities. The Chancellor should to give workers in London enough to afford the essentials and to save.

Many families in London will be forced to choose between heating and eating this winter as energy prices continue to soar. The government has the option of reversing the Universal Credit cuts in response to sharp and unexpected increases in the cost of living — recent polling suggests that few voters would oppose keeping it at least for the hard winter months.

A fair and long-term funding settlement for London’s transport system

Transport for London’s (TfL) short-term funding arrangement with the government expires on December 11. The pandemic left a huge hole in TfL’s finances and the current cycle of short-term bailouts cannot continue if the organisation is to plan and invest over the medium to long term. Around £1-2 billion a year is needed to maintain TfL investment and services. Without this extra money, London risks grinding to a halt as there could be deep cuts in bus, tube and train services in order to save money. As part of any agreement, the government should hand over suburban rail services to TfL. The recent takeover of Southeastern trains by the Government is another illustration of the model failing passengers.

Better homes and neighbourhoods

Average deposits in London of £80-100,000, rent costs taking up an average of close to 50 per cent of pay, around 250,000 people on the waiting list for council housing, and one in 20 households living in temporary accommodation in Newham. All of this speaks to a housing situation that is profoundly broken.

The Chancellor should increase the level of local housing allowance for renters, so that adequate living and working space is not just a privilege of the wealthy. And he should give London boroughs, housing associations and the Greater London Authority greater powers and access to funding to build more council homes and other types of affordable housing. But he should also enact an ambitious retrofit action plan to make London’s existing housing stock greener – financing a gas boiler scrappage scheme as well as funding enhanced grants for insulation and heat pumps.

Jo Corfield is Director of External Affairs at Centre for London. Read more from her here. Follow her on Twitter.