The Shared Prosperity Fund and London

Questions to the Mayor of London – answered on 2nd August 2022.

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Photo of Len Duvall OBE Len Duvall OBE Labour

If, as seems likely, government funding for revenue and capital projects across London is cut over the coming years, how can the GLA work to address the deficit?

Photo of Sadiq Khan Sadiq Khan Mayor of London

The signs are worrying, and it is true that London is already seeing a drop in funding levels. For example, London’s allocation of the UK Shared Prosperity Fund (UKSPF) is less than half the size of the European Union (EU) funding it was intended to replace. In fact, the Government recently published each region’s share of all the various funds designed to support levelling up. Of the 11 major regional funding initiatives, including the Levelling Up Fund, the Regional Growth Fund and the UKSPF, London received by far the lowest amounts per capita, £76 compared to the England average of £342. The second lowest allocation was in the southeast. This Government really is anti-south.

It is clear from these figures that the Government’s focus on other regions is at London’s expense, and I am concerned that London’ future funding prospects will follow this path. London has the highest child poverty rate in the country and if London’s economy is to continue to grow and support levelling up in the rest of the UK, it will require investment in housing and in infrastructure and to reduce the capital’s own substantial inequalities.

London has the potential to fund its own continuing growth if it is given the fiscal levers to do so. We do have some mechanisms for raising funding for public spending locally, including the business rates supplement and Community Infrastructure Levy (CIL). That is building on the work of the two London Finance Commissions, the first Commission established by [the Rt Hon] Boris Johnson [MP, former Mayor of London], the second by me. I would like to explore tax increment financing and other forms of fiscal devolution with Government to enable the capital to continue to grow, without having to rely on the Treasury grant funding. The Government should also devolve to us decision-making for London’s fair share of schemes. We are closer to our communities than Whitehall and, working with boroughs, we can make decisions and cut out wasteful bureaucracy and delays.

Photo of Len Duvall OBE Len Duvall OBE Labour

Thank you, Mr Mayor. Of course, we are still in a state of flux of not quite knowing where the Government is going to go, or the future Government is going to go, on the Levelling Up White Paper. The White Paper itself states that it is,

“... critical that we improve productivity, boost economic growth, encourage innovation, create good jobs, enhance educational attainment and renovate the social and cultural fabric of those parts of the UK that have stalled.”

There are parts of London that have stalled or are in danger of stalling. Would a suggestion of measurable targets for levelling up on an agenda help us here in London in terms of some of the cases that we need to make?

Photo of Sadiq Khan Sadiq Khan Mayor of London

Thanks for your question.  London as a region is the most unequal region in the country. The level of poverty in London, if you go by ward, I am afraid we are top of the list in relation to poverty, deprivation and so forth, poverty in real terms but also in relation to the ability of people to have their potential fulfilled. If there are going to be metrics, they have to be intra-region as well as inter-region and they have to be fair. Yes, there should be support given to the rest of the country, without a doubt, but not at London’s expense. It should look at place, yes, but also people. Communities in parts of Hackney are as deprived as communities in parts of Hull and if you want to level up, you should level up those families in Hackney, just like you would in Hull.

Photo of Len Duvall OBE Len Duvall OBE Labour

OK. Thank you, Mr Mayor.