Greater London Authority will receive £135m more than expected in business rates revenue and £8m extra in council tax returns, reports Kumail Jaffer, Local Democracy Reporter

The new home for City Hall at The Crystal in East London — City Hall

A surge in business rates and council tax returns has handed Mayor of London Sir Sadiq Khan a £142.6million funding boost which he intends to split between youth crime prevention, AI development, and London’s transport system.

Khan’s plans to spend the extra money, discovered by City Hall, on the capital’s transport network and another £20million to help Londoners develop AI skills.

The Greater London Authority (GLA) will receive £134.9m more than expected in business rates revenue and £8.5m extra in council tax returns, the mayor’s final draft budget has confirmed.

While the final policing grant settlement from the Home Office was £32.2m lower than expected, the GLA announced it will use £31.4m of reserves for the planned extra spending.

This extra cash will be split between the mayor, the Mayor’s Office for Policing and Crime (MOPAC) and Transport for London (TfL).

On the mayor’s side, £50m will be invested in further support and opportunities for young Londoners to “keep them away from gangs and crime”, officials say. This will include “targeted interventions […] to break the cycles of violence and deliver positive opportunities.”

Another £20m will be spent on taking forward recommendations from the AI and Future of Work Taskforce to help employees in London learn skills and “succeed in this changing environment”, with the same amount ringfenced for helping secure more “major events” in the capital next year.

Money will also be invested in tackling rough sleeping, supporting tenants and making London’s water spots swimmable.

On MOPAC’s side, £4.5m will be invested in a new crackdown on mobile phone theft on the capital’s streets, which includes a new command cell to respond to incidents in the West End.

Finally, £20m has been allocated to TfL to trial “fares innovation” as the network looks to increase passenger numbers. No detail has been provided on this measure, though City Hall sources have suggested that officials will use it to “implement innovative approaches” to achieve this.

Khan said: “The common thread that runs through everything in this budget is my desire to ensure that all Londoners can get the same shot at reaching their potential that London gave me and my family.

“Safety is the bedrock upon which all else can flourish. That’s why bearing down on crime and keeping Londoners safe is my top priority as mayor and why I’m proposing record levels of investment from City Hall on policing and crime prevention.

“But we can’t be complacent as there’s still much more to do. I’ll continue to use all the levers at my disposal to fund the police, tackle violence against women and girls and provide positive opportunities for young Londoners so that we can build on the significant progress we’re making.

“I am also pleased to propose extra investment to support those sleeping rough get off the streets and help Londoners through the AI revolution, as we continue to build a fairer, safer London for everyone.”

However, the mayor’s critics on the London Assembly warned that the budget is bad news for policing in London.

Hina Bokhari, leader of the Liberal Democrat group, told the Local Democracy Reporting Service (LDRS): “This budget will be a bitter pill to swallow for the Met.

“The commissioner is being set up to fail, short-changed by the government, let down by a mayor who has failed to make the case for the money London needs, yet still expected to put 1,300 more officers on the streets without the cash to do it.

“We’ve already seen brutal choices, like the mayor breaking his manifesto promise and shutting down police front counters across London. This budget lays bare the bleak reality that even more devastating cuts are still to come.”

Neil Garratt, the City Hall Conservatives budget spokesperson, added: “Behind the mayoral spin and cherry picking, this is a bad budget for London.

“Just since December, we’ve lost another £59m from police, there’s still no sign of the money for any of the big transport projects we were promised, and now the mayor is raiding the reserves. That’s reckless when the government is cutting even more from London next year.”

Last month the London Assembly voted for any additional funding found between the mayor’s draft and final budget to be spent on policing and making tube stations step-free.

A motion from the Labour group was passed by a simple majority with the help of Liberal Democrat members, with the nine Conservative members voting against and the Green and Reform groups abstaining.

The vote is non-binding, which means that Khan does not have to accept the outcome but will now be forced to produce a response as to why he will accept or reject the proposal when he presents his final budget next Thursday (26th).

The London Assembly also has the legal power to overturn or pass final, binding amendments the mayor’s final budget, but it will require two-thirds of members to do so – or 17 of the 25 assembly members, eleven of whom are Labour.

Reform UK’s assembly member Alex Wilson told the LDRS that his party were planning to lay down amendments next week.

“London is marred by problems on a truly unprecedented scale,” he said. “The mayor’s disastrous policies have put policing in retreat, made us the congestion capital of Europe, and scuppered the chances of young people to get on the housing ladder.

“Instead of addressing these fundamental failings, largely caused by him, Sadiq Khan is spending a further £1.2billion on climate zealotry, including decarbonising the police estate whilst slamming police station front doors on Londoners’ faces.

“It will be up the other parties to do the right thing and vote with us.”

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