Following the government’s announcement on Exceptional Financial Support (EFS) for local authorities, London Councils has repeated its call for a sustainable solution to the crisis facing town hall budgets.

The EFS framework has been in place since 2020 and enables councils to take emergency loans from the Public Works Loan Board to help address their immediate financial pressures. The government confirmed seven London boroughs will receive EFS in 2025/26, totalling £418m – a significant jump from the two London boroughs receiving EFS of £71m in 2024/25.

Chair of London Councils, Cllr Claire Holland, said:  “Years of structural underfunding combined with fast-rising demand for services and skyrocketing costs have created a perfect storm for borough budgets. These figures show almost a quarter of town halls in London would face financial collapse without emergency borrowing.

"Exceptional Financial Support is a misnomer – it is no longer exceptional and it fails to provide sustainable financial support, instead forcing local authorities to borrow to maintain basic statutory services. Rather than resolve the crisis, EFS is a short-term measure that leaves us with more long-term debts to worry about.

“We desperately need a sustainable solution to the crisis in local government finance, which has been years in the making. We welcome the government’s commitment to working with local authorities to reform a funding system which is fundamentally broken and to bring long-term stability to council finances. London boroughs will be making the case for restoring overall funding to 2010 levels and ensuring it is distributed in a way which meets local need, alongside other crucial interventions to stabilise budgets and avoid further cutbacks to local services.”

In its submission to the government’s Spending Review, London Councils highlights the worsening pressures on borough finances. Our analysis shows boroughs in the capital face a funding gap of at least £500m in the coming year (2025/26). You can read London Councils' submission to the Spending Review in full here.

London Councils' Grants team attended a project visit to the Asian Women’s Resource Centre, in Harlesden last week in an event attended by Her Majesty Queen Camilla. The project is funded by the London Boroughs’ Grants Programme (Priority 2: to support the Ending of Harmful Practices).

Marking the charity’s 45th anniversary, The Queen officially opened the centre’s Healing Garden, a space for reflection and rejuvenation for women, staff and the wider community.

The event was also attended by Brent Council Leader Cllr Muhammed Butt, Mayor of Brent Cllr Tariq Dar MBE, representatives from the Mayor’s Office for Policing and Crime and representatives from other London Councils-funded projects, such as Women’s Resource Centre, Imkaan, Ashiana and the Forward Project.

You can find out more about our current (2022-2026) Grants Programme and the funded projects here.

The One World Living Sustainable Neighbourhood Model has made the 2025 LGC Awards shortlist. The Model is shortlisted in the Future Places category, which recognises councils that are engaging creatively with innovative suppliers to accelerate decarbonisation and climate resilience, enable greater inclusion, and harness digital technologies.

The Model, hosted on the London Councils website, visualises a sustainable, circular economy, showcasing real life case studies to inspire London boroughs to act to reduce their consumption-base emissions.

Congratulations to all the London boroughs who have been shortlisted for the 2025 awards - you can read this year's shortlist in full here.

A by-election took place in Brent council's Alperton ward last week (Tuesday 18 February). The by-election was won by Charlie Clinton (Lib Dem). You can read the full result here.

A by-election took place in Barking & Dagenham council's Whalebone ward last week (Thursday 20 February). The by-election was won by Rubina Siddique (Lab). You can read the full result here.

There were two by-elections in Hammersmith and Fulham last week (Thursday 20 February). The by-election in the Hammersmith Broadway ward was won by Callum Nimmo (Lab). You can read the full result here. The by-election in the Lillie ward was won by Lydia Paynter (Lab). You can read the full result here.