William Eichler 17 June 2020

Khan warns of ‘significant cuts’ to deal with economic impact of Covid

The Mayor of London today warned that he will be ‘left with no choice’ other than to make significant cuts unless the Government urgently acts to support local and regional authorities.

Sadiq Khan said the cuts would hit the Metropolitan Police, London Fire Brigade, Transport for London and the Greater London Authority and would undermine the Government’s pledge to recruit 20,000 new police officers.

It would also impact efforts to transform the London Fire Brigade in the aftermath of the Grenfell Tower fire, he added.

The GLA Group faces a forecast £493m budget shortfall over the next two years as a result of the loss of business rates and council tax income due to Covid-19. This is in addition to emergency costs already incurred by the GLA Group.

The Mayor has committed to take an immediate 10% pay cut and to freeze the salaries of his 15 direct appointments and he said he will do ‘everything possible to protect frontline services’.

Mr Khan also called on ministers to keep their promise that there would be no new era of austerity as a result of the coronavirus.

‘Londoners did the right thing to tackle Covid-19 by following the rules, staying at home and helping to save lives. But now the Government is punishing them with a new era of austerity,’ he said.

‘Covid-19 has had a devastating impact on London’s public finances which were in great shape before the pandemic. TfL’s fares income has dropped by more than 90 per cent and local business rates and council tax income has fallen off a cliff.

‘This is the worst possible time for a return to austerity – just when we need to invest in London’s recovery.’

The local government minister Simon Clarke told the Commons on Monday that the Government was working on a ‘comprehensive plan to ensure financial sustainability of councils this financial year’ and he insisted that councils should not resort to austerity measures.

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