Merton Council calls for urgent clarity on funding package, amid £17m gap

Merton Council  has written to local  MPs with an urgent request to seek clarity over future funding support for councils in London.

This week, London Councils – the body that represents all boroughs in the capital – outlined the pan-London requirement for councils, specifically asking for funding to close the gap caused by the pandemic, as well as certainty around funding for 2021-22.

At the same time Merton, which represents the Wimbledon, Mitcham, Morden and Colliers Wood areas of London, has confirmed that as a result of the pandemic, its budget gap for next year has already risen from £3m to £17m.

Merton’s Cabinet Member for Finance, Councillor Mark Allison, who is due to take over as Leader of the Council in November, has now written to local MPs, urging them to raise the matter in the Commons and put pressure on ministers to outline how they will resource local services to protect people during the second wave.

Cllr Allison said: “Councils like Merton have led the country’s response to Covid-19 pandemic. This has come at huge financial cost, with councils in London alone facing a £1.4 billion funding gap as a result.

“In Merton alone, the combination of lost income and the additional services we have provided to protect people during the pandemic has seen our budget gap for next year rise from £3m to an eye-watering £17m – and many councils in the capital are facing similar, if not worse shortfalls.

“At the same time, more and more responsibility for protecting the public is being passed to local authorities, creating long-term impacts on our budgets, while we continue providing hundreds of other services which have not gone away.

“I’m now asking that Merton’s political representatives add their voices to those being made clear across London. Immediate steps need to be taken to clarify the funding package for local authorities, and to ensure that, when we do come out of the pandemic, councils aren’t forced to slash the other vital services we provide.”

The pan-London call for certainty on funding calls on Government to give clarity on:

  • Providing immediate compensation to cover the £1.4 billion funding gap caused by the pandemic, including lost Council Tax and Business Rates.
  • Certainty around funding for 2021-22, including grants and council tax principles.
  • Resources to fulfil councils growing roles in managing the on-going pandemic in future years.
  • Above-inflation increases over the 3 year period that also take account of underlying demand pressures in key services, including Adult and Children’s Social Care (£430m), Public Health (£130m), Homelessness (£200m), High Needs education funding (£100-200m) and supporting people with No Recourse to Public Funds (£50m).
  • Clarity over the funding for the Dedicated Schools Grant deficit
  • A new approach to the long-term funding of local government including new sources of revenue and greater fiscal devolution.