A new London Assembly report warns that Mayor Boris Johnson will face “his toughest financial decisions yet” when setting London’s 2012/13 budget.
Next year’s budget will be the second since the Westminster coalition embarked on its austerity programme and slashed hundreds of millions from London’s annual financial settlement.
City Hall has two main sources of income – the Greater London Authority’s share of the council tax and fare revenues.
Last year the Mayor froze the council tax precept and most City Hall observers expect him to do likewise this year, a move which would limit his ability to offset cuts to central Government grants.
As part of his plan to reduce overheads, the Mayor has called on the GLA’s functional bodies – including Transport for London, the Met Police and London Fire Brigade – to share back office services.
In today’s report the Assembly calls for the Mayor’s draft budget to “include the details of specific shared services projects within proposed savings and efficiencies for the relevant organisations.”
Assembly Members are also calling for greater public information on City Hall’s borrowing.
In the current financial year the Mayor announced plans to borrow £110 million over the next four years, this includes £40m to set up his Outer London Fund.
AMs have noted that the publicly available Mayoral Decision authorising the borrowing “did not include any information about expected economic benefits, the timing of repayments or interest costs.”
John Biggs AM, Chair of the London Assembly Budget and Performance Committee, said: “It is becoming increasingly challenging for the Mayor to protect services that millions of people in the capital rely on every day. This looks set to be his toughest budget yet.”
The Mayor will publish his draft 2012/13 budget for consultation in December 2011 and his final budget in February. The London Assembly can amend his final proposals only if at least two thirds of Assembly Members vote to do so.
The full report can be downloaded from london.gov.uk