London is to receive government funds to build the tunnel to link the HS2 rail route from Old Oak Common to Euston station and Transport for London will receive £485 million for its capital renewals programme under measures announced by Chancellor Rachel Reeves in the first budget of the new Labour national government.
Reeves’s measures, which will raise a total of £40 billion, also include London’s boroughs, along with every other local council, being able to retain all their receipts from council house sales made under the Right to Buy, along with a five-year, above inflation rent settlement for all social housing providers to help them increase their building programmes.
The budget also commits the government to exploring how the Greater London Authority might receive an “integrated” funding settlement from 2026-27 along the lines of those already confirmed for the West Midlands and Greater Manchester, which would give City Hall far more freedom and flexibility over how it spends central government funding.
Sadiq Khan has welcomed as “fantastic news” what he called the “substantial additional funding” for TfL, nearly double what was received last year, which the budget document says will “cover rolling stock on the Piccadilly and Elizabeth lines”, and said the HS2 funding means “the capital can finally realise the full economc benefits of the project”.
The government has also said that resulting private investment in the Euston area “will be further supported” through the appointment of Bek Seeley, formerly of development company Lendlease, to chair the Euston Housing Delivery Group “to drive forward an ambitious housing and regeneration initiative for the local area”.
Camden Council leader Richard Olszewski described the government’s commitment as “an opportunity to start a new chapter for Euston” following “years of uncertainty” with residents of the area facing “years of upheaval and lost homes and livelihoods”.
Olszewski expressed hope for a future with “thousands of new jobs, the restoration of lost green spaces, and the building of much needed affordable homes and community facilities – all delivered alongside a new station.” He added: “Investment in Euston will reach far beyond our borough. It is an opportunity to put innovation at the heart of Britain’s new economy and accelerate the growth of London’s Knowledge Quarter – a home to world leading tech and science businesses and one of our country’s biggest economic hubs.”
Responding to the housing measures, Fiona Fletcher-Smith, chair of the G15 group of London housing associations and chief executive of L&Q, said there was “much to appreciate in the budget, particularly its confirmation of the additional £500 million for national Affordable Homes Programme, but said the rent settlement – set at consumer price index inflation plus one per cent – “falls short of what is urgently needed” when a ten-year deal was required.
As well as welcoming measured to boost housebuilding, the cross-party London Councils, which represents all 33 of the capital’s local authorities, praised the budget’s £233 million of additional funding for local government services preventing homelessness and its further investments in special educational needs and social care provision.
However, it stressed again a forecast overall funding gap of £700 million for the capital’s boroughs and a “28 per cent real terms reduction in funding per Londoner since 2010” and still anticipates “a sizeable shortfall”.
London Council chair Claire Holland, also leader of Lambeth Council, said: “While the Budget will help to address some of the immediate pressures we face, the outlook for borough finances remains extremely tough after 14 years of structural underfunding. Next year’s Comprehensive Spending Review will be a crucial opportunity to ensure London boroughs have the resources we need to be an effective partner to national government over the coming years and help to drive growth across the capital.”
Dave Hill is the published and editor of OnLondon.co.uk. Support this unique website and its freelancers for just £5 a month or £50 a year and get things for your money that other people don’t. Details HERE. Photo: Screen grab from BBC.