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64% cut to Ealing's budget

Local MPs urged to speak up for Ealing ahead of comprehensive spending review

Councillor Julian Bell, leader of Ealing Council, and Councillor Bassam Mahfouz, cabinet member for finance and leisure have written to the borough’s three MPs asking them to make representations to the Ministry for Housing, Communities and Local Government and Treasury on Ealing’s behalf.

Letters have been sent to Ealing Central and Acton MP Rupa Huq, Ealing North MP, James Murray, and Ealing Southall MP, Virendra Sharma. In them, Councillor Bell and Councillor Mahfouz ask the MPs to speak up for local residents, businesses and communities and to help amplify important messages coming from London Councils (a cross-party organisation representing the capital’s 32 borough councils) about the financial impact of COVID-19 and the stark funding pressures ahead.

Ealing Council is leading the local response to COVID-19 and the financial impact of this work to date totals £71million. Despite agreeing to pay councils in full for their COVID-19 work, government still owes Ealing £14.8million.

This unpaid bill comes on top of a £143million cut in Ealing’s government grant cut over a decade; the equivalent of a loss of 64p in every pound we used to receive.

Ealing is now facing an in-year budget pressure of £26million and is also forecasting a budget gap of £28million for the next financial year; one of its biggest ever.

The picture across London

The letters to MPs detail a similar picture cross all the London boroughs who are together looking at a £1.4billion financial hit from COVID-19, alongside uncertainty around future government funding, a drop in income from important sources such as fees and charges and council tax, and a rise in demand for services that support Ealing’s most vulnerable residents.

As part of the comprehensive spending review due this autumn, London Councils is asking the government for the following:

  • 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 three 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)
  • A new approach to the long-term funding of local government including new sources of revenue and greater fiscal devolution.

“We need the government to do more”

Councillor Bell said: “London has been hit hard by this pandemic and these are very worrying times. Many councils are at a financial breaking point with no certainty ahead about the financial settlement they can expect from government, or the extra COVID demands that could be placed on them in the future, and Ealing is no exception.

“We led the local response during the COVID-19 pandemic, providing food parcel deliveries for vulnerable people, giving millions of pounds in business rates and council tax relief for struggling residents and business, supplying thousands of free parking permits for local key workers and much more. This was the right thing to do, but it all comes at a price.

“Our services are now under great strain, because demand is growing. And at the same time, our local economy has taken a big hit, because so many of our residents either work at Heathrow, or for companies that supply Heathrow. Together with other west London councils, we are fighting for our local economy, but we need the government to do more to help too.”

Councillor Bassam Mahfouz, cabinet member for finance and leisure, said: “Despite a 64% cut in government funding, before COVID-19, we were in reasonable shape. Our Future Ealing programme was delivering transformational work, alongside making our services more efficient.

“The health and social impact of the pandemic has been disastrous, and as an organisation delivering frontline services in the fight against the virus, we need more financial support from government if we are going to be able to meet the critical needs of our residents. It is not fair that our residents have triple whammy of facing the health impacts, the financial impact on jobs and the cost of picking up the unpaid COVID-19 bill from government.  If the government fails to deliver on its promise to cover the costs of COVID-19, we are looking at having to make some very sobering decisions about services that residents value the most.

“Our priority remains to protect the most vulnerable, but I am very concerned about what lies ahead.”

The letter sent to the MPs is available to view here.

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