A cross-party group of London MPs has heard that investing in local services at the upcoming Spending Review will help generate economic growth in the capital and across the country.

The All-Party Parliamentary Group (APPG) for London held a panel discussion exploring London's needs from the Spending Review, led by two of the group's co-chairs, Florence Eshalomi MP and Peter Fortune MP.  

Cllr Claire Holland, Chair of London Councils, told the meeting that boroughs and their services play a key role in encouraging growth. This includes through supporting Londoners into work, delivering new homes and infrastructure, and attracting investment into communities. However, the capital's worsening homelessness emergency and crisis in town hall finances represent significant barriers to London’s growth potential.

Boroughs in the capital face a funding shortfall of at least £500m this year (2025-26), with London Councils warning of worrying implications for local services. Seven London boroughs are dependent on emergency borrowing (through the current Exceptional Financial Support scheme) to balance their budgets and avoid insolvency.

Cllr Claire Holland, Chair of London Councils, said: “The Spending Review is a vital opportunity to deliver investment in local services, housing and infrastructure, in order to boost economic growth.

“The worsening housing emergency and the ongoing crisis in council finances are two huge barriers to growth in the capital. If we don’t get to grips with them, we aren’t going to get growth – it’s as simple as that.

“Boroughs are critical engines of growth, but we are running on empty. The extreme pressures on our budgets are completely unsustainable.

"Restoring financial stability to local government and investing in local services, alongside additional investment in housing and infrastructure, will enable us to turbocharge growth in the capital and across the country.”

Among London Councils’ Spending Review asks is a call for overall council funding to be restored to 2010 levels by 2028-29, requiring real-terms increases of 4 per cent every year.

London Councils' priorities also include increased funding for demand-led services to meet forecast levels of growth, access to a broader range of funding sources, and investment in the early intervention and prevention services that bring the most benefits over the long term.

A new £30m investment will help young Londoners and people living with health conditions overcome barriers to employment through Get Britain Working Trailblazers.    

The UK Government funding will enable the Mayor of London and London boroughs to deliver five innovative new programmes in the city.

The Get Britain Working Trailblazers focuses on joining up existing local services in the employment, health and skills, and youth industries to get people into work. The five programmes will work with more than 5,000 Londoners over the course of one year and will support the London Growth Plan, launched by London Councils and the Mayor earlier this year.

Cllr Peter Mason, London Councils’ Executive member for Planning and Skills, said: “With 1.3 million Londoners currently economically inactive and 1 in 5 young people in the capital unemployed, it's vital we have high-quality local support in place to help remove barriers to employment and support people into jobs and training. Not only will this benefit our residents and improve living standards, it will allow us to make most of the untapped potential and talent in our city in order to drive inclusive economic growth.

“Thanks to the Government’s £30 million trailblazer funding for London, boroughs have the investment boost we need to test new and innovative approaches, working through our sub-regional partnerships to learn what works best. These trailblazers will help pave the way for long-term transformation of employment support services, ensuring they are more integrated, deliver better outcomes and ensure the best possible value for public money."