Covid: London sees largest council cuts per person due to pandemic

London councils will see the largest per-person budget cuts due to the impact of the coronavirus pandemic, BBC research suggests.

A study of local authority finances found London councils will cut budgets by £39.27 per person on average this year. The UK average is £30 per person.

Croydon and Bexley councils have been granted bailouts by central government to cover "unmanageable pressures".

"The pandemic has hit London borough finances hard," London Councils said.

The cross-party organisation that represents the capital's local councils said: "The impact of the pandemic will continue to be felt across the city beyond this financial year."

Across the UK, councils hit by falling income and increased costs will need to find a combined £2.98bn to balance the books by 2023-24.

London councils face an expected shortfall of at least £425m.

In total 10 councils across the UK have applied for a combined £290m in emergency funding.

These are Bexley, Croydon, Eastbourne, Luton, Peterborough, Wirral, Nottingham, Redcar and Cleveland, Copeland and Slough.

The applications, approved by Ministry of Housing, Communities & Local Government, allow local authorities to take loans to plug financial gaps.

In England, three sets of funding totalling £5.2bn have been distributed to local authorities to support extra costs associated with the pandemic since April 2020.

In response to the pandemic, councils in England and Wales were given the option to raise council tax by up to 4.99% with 3% ring-fenced for spending in adult social care.

The previous cap had been a maximum of 4%, with 2% ring-fenced for adult social care.

The BBC approached 217 councils in the UK in total, asking for details contained in each authority's finances.

All 20 London councils that responded to the BBC investigation are raising council tax - 15 of which have raised taxes by the maximum amount.

Across the UK, councils plan to use £523m worth of reserves to balance budgets this financial year.

Six councils plan to use financial reserves to balance budgets this year. In Lambeth the council intends to use £12.8m of reserves.

Councils are required by law to maintain financial reserves to cover emergency spending.

A London Councils spokeswoman said: "The effects of 'long Covid' are increasing demand for, and the complexity of, adult social care needs, and both children and adult social care are seeing rising demand for services.

"Plus it is far from certain whether income streams will recover to pre-pandemic-levels.

"London boroughs desperately need these pressures to be recognised and funded by government in the forthcoming Spending Review."