London to lose out on major local growth funding in Spending Review
The London Mayor has doubled down on his crusade against the terms mandated by the Treasury’s Spending Review amid concerns over losing access to local growth funds.
London and other English regions could lose access to the £2.6bn UK Shared Prosperity Fund, Growth Hub Funding, and the £4.8bn Levelling-Up Fund.
A source close to the mayor criticised the Treasury for the move, as “they say they want regional mayors to be the drivers of growth but then remove their levers to achieve growth.”
The funds, which mostly fall under Deputy PM Angela Rayner’s remit as head of housing, target public services and look to boost jobs, with a particular focus on the tech sector.
The mayor’s team has bemoaned a sense of unfairness, as the capital “contributes hugely to the Treasury in tax revenues.” Cutting these “incredibly effective” funds could see this tax revenue dwindle.
The source emphasised concerns in City Hall that funding directed towards child poverty is at risk, something which is “not consistent with Labour values.”
London has the second highest level of child poverty in the country and recent reports have shown Reform UK are making inroads into areas with higher-than-average child poverty rates.
London transport upgrades unfunded
Khan has been lobbying for extensions to the Bakerloo line and the DLR, as well as the power to introduce a tourist levy, though these requests have fallen on deaf ears.
The Bakerloo line proposal, which would see the line extended from its Elephant & Castle terminus to Lewisham is projected to cost between £5.2bn and £8.7bn, while the DLR extension to Thamesmead could cost up to £1.7bn.
Instead, the chancellor has been focusing her energies on the regions which have seen substantially less infrastructure investment in previous years, as Labour MPs in the North and the Midlands warn that voters frustrated with poor local transport services could be tempted by Reform.
The new strategy is unwelcome in City Hall.
A source close to the mayor said: “The way to level up other regions is not to level down London.”