Councils seeking a hike in grants

Social care and recycling services could be affected, councils warn

Councils in London have said they may have to cut back services like social care and recycling if the government fails to increase their grants.

London Councils, a lobbying group for 33 boroughs, said the minimum 1.75% funding hike will not match the costs given the current economic downturn.

The organisation warned that financial difficulties could result in thousands more using social care services.

London Councils said public services could be "irreparably damaged".

The government decides the rate of increase in central grants for councils in three-year plans and the funding was announced last year.

Local government minister John Healey had warned that grants would be changed only in "exceptional circumstances".

'Counting the cost'

Under current plans 24 London authorities will receive the minimum 1.75% increase in central funding even though inflation is at 4.5%.

London Councils chairman Councillor Merrick Cockell said: "London's public services could be irreparably damaged if the government presses ahead with its plans for a real-terms cut in funding to our local authorities.

"As the impact of the downturn bites, our residents are likely to rely even more on our services - but the three-year settlement will fail to account for any of this."

He warned that local authorities could be left "counting the cost".

Richmond Council is one of those in line for the 1.75% rise.

Its deputy leader Stephen Knight said: "The risk in the longer term is that either council taxes will have to go up in the next few years above what they would have done anyway or alternatively, and I suspect this is more likely, services will have to be cut back and neither of those things are really palatable."