Sadiq Khan will cut jobs and slash his flagship climate policy in half to balance City Hall budgets hit hard by the coronavirus pandemic.
The Mayor will publish his slimmed down Greater London Authority (GLA) spending plans, cutting £38 million over the next financial year.
City Hall warned of an “unprecedented” fall in business rates and council tax income as a result of the coronavirus pandemic.
It is set to lose £493 million over this financial year and the next, according to latest estimates.
Mr Khan’s draft budget – seen by the Local Democracy Service – will rely on £86 million of reserves next year.
The Mayor is also setting up a £500,000 war chest to cover the cost of redundancies.
Though the number of job losses is not yet confirmed, the budget states that “it is clear” there will be a reduced “headcount” at City Hall.
Mr Khan’s flagship Green New Deal – a plan to make London carbon neutral by 2030, announced in January – will be reduced to £22 million.
His revised budget will focus on the immediate and longer term recovery from coronavirus, based on the priorities set by the London Recovery Board.
The emergency committee – led by the Mayor and London Councils – has kept the 2030 target to make London carbon neutral.
The board is also pushing for high street regeneration, better youth services, more jobs for Londoners, improved digital access, and more mental health support in the capital.
Mr Khan said the new budget provides “a chance to reimagine our city,” and blamed the Government for imposing cuts on local government “at the worst possible time” during the pandemic.
“Ministers are refusing to refund City Hall, the Met police, local councils, TfL and other public services for the full cost of tackling Covid-19 and the income we’ve lost as a result,” he said.
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“This only makes our job harder – but I remain steadfast in my commitment to do everything possible to aid London’s recovery from this awful pandemic.”
The GLA budget covers City Hall spending, with major projects on affordable housing, rough sleeping and adult education, as well as the environment.
The £602 million cash pot for next year includes £390 million from external sources, including Government grants, plus the £86 million reserves.
The remaining £126 million comes mainly from business rates and council tax – but this is nearly a quarter (23%) less than the last financial year.
The Mayor plans to make £12 million savings from back office cuts such as human resources and technology.
But this includes the already announced savings that will begin next year when City Hall moves to the Royal Docks in Newham.
The remaining GLA budget cuts will come from frontline schemes, but the nature of these is not yet confirmed, and will depend on final business rate and council tax income to be confirmed early next year, City Hall said.
The cuts announced – less than 2.5% of next year’s GLA budget – still leave significant savings to be made elsewhere.
London Assembly sources branded the changes a “drop in the ocean” and warned that the Mayor is pushing for proportionately bigger cuts in other areas.
Budgets for the other bodies the Mayor oversees – including the Met, the London Fire Brigade – will be published by the start of next month, according to an announcement.
The Met – which relies more heavily on business rates and council tax – is facing a £110 million cut, with £25 million from the fire service.
Mr Khan has previously said local government could not have prepared for the “scale of the challenge” from coronavirus, but pledged to protect front line services.
The Mayor’s Office could not be reached for comment.
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