Published today, Investing for Recovery – a new deal for London, is a joint report by the GLA Group and London Councils, working in the interests of all 33 London authorities. The report makes clear London’s dominant economic role; heralding the capital as the engine room, driving the UK into recovery, and makes the claim for fairer funding.

The report bids for a fairer funding model that takes into consideration London’s high turnover of population, resulting strains on public services, and the capital’s intractable social problems, including poverty levels and insufficient housing.

As part of a joint lobbying campaign, conducted at official and ministerial level, the Mayor wrote to Liam Byrne, Chief Secretary to the Treasury, on 30th October requesting a meeting to discuss the capital’s financial future, but has yet to receive a reply.

Already punching above its weight, with just 12 per cent of the country’s population, London contributes more to the Treasury than any other region; its economy is greater than that of Scotland, Northern Ireland, Wales and the East Midlands combined. To maintain its position, the capital needs continued investment, but with greater freedom for the boroughs to decide how money is spent.

Boris Johnson said: “I am disappointed that Liam Byrne has not taken up my offer of a meeting. There is no denying that London is the economic engine room of the nation and we need a strong economic alliance between City Hall and Westminster.

“Londoners already do more than their fair share. We pay much more in tax than we get back in public expenditure. We are driving the economy into recovery. Londoners are, on average, 30% more productive than the rest of the UK, plus those who leave take their skills and experiences with them, honed in the world’s business capital.

“London has consistently replenished the Treasury coffers over the last twenty years. What we want is a fair deal, only a fair deal, and will give a great deal back to the nation.”

Chairman of London Councils, Councillor Merrick Cockell said: “London is unique. Not just because of its importance as the country’s capital but because of the mix of challenges our public services face on a daily basis – including an overstretched transport system, overcrowded homes, the dire lack of affordable houses, and large pockets of deprivation.

“This is not a case of us simply calling on the government to give more money to London. It is about investing in the leadership and innovative thinking from boroughs and their partners, including the Mayor, in tackling the problems this city faces head on.

“It is supporting this work with a fair share of funding that will help us support our communities on the long road to recovering from the recession and build for the future. This in turn will have major benefits for the rest of the country.”

Ahead of the Pre-Budget Report (9th December) and in anticipation of future spending reviews and public finance constraints, this report outlines why strong economic growth in the capital benefits the whole country and argues the case for:

- Funding to be maintained by central government for key investments that will help the country as well as the capital, especially Crossrail, the rebuilding of the Underground and skilling our population to compete in a globalised economy.

- Fairer revenue funding to enable London’s leaders to tackle persistent social problems – where London’s needs remain high relative to the country as a whole. London’s population is growing, and will hit 8.1 million by 2016; and the costs of its public services remain higher than the rest of the country by around 20-30 per cent.

- And, in certain areas, changes to the distribution of national funding where London’s social and other needs remain more challenging than in the rest of the country.

A copy of the report can be found here

Investing for Recovery – a new deal for London is a deliverable of the City Charter – a voluntary agreement between the Mayor of London and London Councils. An agreed area for joint action in the City Charter is to campaign for a fairer share of funding and investment in London from central government.

The 2010-2011 Provisional Local Government Finance Settlement was announced on Thursday 26 November, which again saw London boroughs receiving the lowest government grant increase of any region.

The government provides local authorities with an annual grant through the Local Government Finance Settlement. This allocation has a significant impact on the services local authorities provide, council budgets, and council tax levels.