London Councils has welcomed a new report from the Housing, Communities and Local Government Committee warning that successful efforts to tackle rough sleeping during Covid-19 risk being squandered unless the government funds “a comprehensive exit strategy”.

London faces the most severe homelessness crisis in the country. Boroughs have been on the frontline of the capital’s response to Covid-19, securing alongside partners, emergency accommodation for around 4,000 rough sleepers since the start of the pandemic.

Cllr Darren Rodwell, London Councils’ Executive Member for Housing & Planning, said: “Since the start of the pandemic, boroughs have worked flat out to support homeless Londoners and secure emergency accommodation for rough sleepers.

“We now have an unprecedented opportunity to permanently embed this progress. An end to rough sleeping is within our grasp – but it requires urgent action from the government, including a range of policy measures and investment in frontline services.

“Boroughs urge ministers to take note of this crucial report and its recommendations. Unless a comprehensive strategy is put in place soon, we risk rough sleepers returning to the streets – and no-one wants to see that.”

Two boards have been set up to plan and manage London’s recovery from the Covid-19 crisis. The London Transition Board will look at transition out of lockdown and will remain in place until the end of 2020.

In parallel, the London Recovery Board Board, chaired by London Councils Chair Cllr Peter John and the Mayor, will plan and oversee the capital’s long-term economic and social recovery, developing a strategy to reshape London into a greener, more equal, and more resilient city than it was before the crisis. The Minister for London, Paul Scully, will attend the Recovery Board on behalf of government.

Cllr Peter John, Chair of London Councils, said: “London local government has made an enormous contribution on behalf of Londoners in response to COVID-19 to date.  We now must be ready to work closely with all of our communities across the capital and with our key partners, including the Mayor, Government and others to ensure that we are able to transition safely out of lockdown and pursue London’s economic and social renewal in a way that our city needs."

London Councils has collated a summary of the London local government finance pressures based on the boroughs’ recent finance returns:

• We are estimating £1.8 billion of extra pressure on London boroughs’ finances this year due to Covid-19.

• Of this, £1.1 billion is caused by boroughs’ income loss and £700 million by increased expenditure.   

• The government support announced so far equates to £500 million for London boroughs, which means there’s a remaining gap of £1.3 billion in new financial pressures.

• Boroughs’ £1.1 billion income loss is due to falling returns from fees and charges, council tax, business rates, Housing Revenue Account and commercial income.

• Approximately half of boroughs’ £700 million anticipated increased expenditure will be on adult social care and in covering planned savings that will not now be achieved. Over £50 million extra is expected to be spent on homelessness and rough sleeping, with a similar amount on children’s social care.

• Boroughs have had £500m so far in emergency funding (£550m if you include the recent adult social care provider funding) but boroughs are telling us their additional pressures in March, April and May already exceed this (£600m). That is before we even look at the rest of the year.

Cllr Peter John, Chair of London Councils, said: “From setting up community food delivery hubs to sourcing PPE for care workers, London boroughs are at the forefront of the capital’s coronavirus response.

“This has led to increased costs and higher levels of demand, compounded by significant drops in income due to the national economic slowdown. Our latest monthly returns show boroughs are dealing with £1.8 billion extra pressure on their budgets.

“The Government funding councils have received thus far has gone some way to relieve immediate financial pressures. In London, boroughs have been given £500 million, leaving a potential shortfall far in excess of £1 billion.

“The Secretary of State’s commitment to give all councils the resources they need to support their residents and businesses through this pandemic cannot waver.  We need a secure financial base to go forward so that we can rebuild our local economies and have sustainable and consistent funding to maintain vital services such as adult social care.”