The Greater London Authority (GLA) is “unlikely” to fill an impending £19.2million budget gap, a senior officer has admitted – and finances could take a further £2.2million hit if West Ham are relegated.
Mary Harpley, Chief Officer at the GLA, told the London Assembly that current projections around the deficit could change but suggested it would not be wiped out entirely by the time the final draft budget is presented in February.
Speaking to the Budget and Performance Committee on Tuesday (November 18), officials said that an “unprecedented level of uncertainty” has meant they have not been able to start drawing up proposals to try and close the predicted funding gap. The GLA says it is still waiting for formal announcements on business rates, local government reform, and the proposed Integrated Settlement for London.
When asked if the budget gap could end up at “zero” after all uncertainties are resolved, Ms Harpley said it was “unlikely”. She was unable to give a prediction of the gap at the end of the process, adding: “Not at the moment – this is the gap generated by this draft budget with this level of uncertainty. We have to see where all of that uncertainty lands.”
The mayor’s Chief of Staff, David Bellamy, added: “This [document] is before the government’s annual budget and before the provisional settlements. There is clearly more uncertainty about those provisional settlements than there were in previous years because the government is undertaking a major review of local government funding which will impact us.
“Anything is possible – it’s not a case where you can blame the gap on the Labour government, we just don’t know what’s going to come. We’ve assumed council tax and business rates will continue in the way they have – beyond that, there are a range of things that will occur within the year as we secure additional funding.
“Normally, we would have addressed them in the way that we have been doing year on year. It’s just we haven’t done at this point because we need to look holistically as we see what the figures are. It’s just we are at that point of uncertainty because the government is addressing so many of the things that have been mutually not been addressed over the last five or so years.”
He said the provisional settlement will likely come before MPs rise for the Christmas recess on December 18. Only after that can the GLA work through the numbers and present a draft group budget on January 15. The final budget will then be presented in February.
Neil Garratt, the City Hall Conservatives’ finance spokesman, told the Local Democracy Reporting Service (LDRS): “By their own admission, [this is] the toughest and most uncertain budget position the GLA has ever been in at this stage, yet this is 18 months after the election at which Londoners were told that electing a Labour government would ‘put the wind in the sails’ of London.
“The mayor’s officials put a brave face on it, but the mayor must feel badly let down by the Labour government he spent so long calling for.”
In a document presented last week, the GLA said that the £19.2million revenue gap was “unavoidable”, despite drawing on £4.7million of reserves. This is down to a number of “strategic” decisions, including £10million that needs to be found to mitigate the “worst effects” of the end of UK Shared Prosperity Funding next year. In 2025-26, the GLA received £62,981,782 from the project.
Officials also said £9million will be needed for other necessary “realignments”, including an “increased budget for the London Resilience Unit” and the transfer of GLA staff to their new Palestra headquarters in Southwark by the end of next year, as the lease on office space in the London Fire Brigade’s headquarters in Union Street is due to expire.
It also emerged that the gap could be even worse in coming years if West Ham United get relegated from the Premier League.
The East London club – currently languishing in 18th and thought to be a serious contender for demotion to the Championship next season – currently pay £4.4million a year to rent out the London Stadium, formerly the Olympic Stadium. But Mr Bellamy said this could fall by 50 per cent if West Ham go down to the second tier of English football.
The GLA, which now owns the stadium, already makes a loss on helping run events at the stadium. Last year’s budget saw £19.5million put aside for costs, while the draft 2026-27 document has earmarked £12million.
Mr Bellamy said the “badly written” deal agreed by previous Mayor Boris Johnson has no break clause. He added: “The previous Mayor negotiated and signed a contract that is a bad financial deal for Londoners.
“It is important to say that the stadium is a real asset for London and we want to get the best from that asset. It’s clear that were West Ham to be relegated then we would need to find additional support. I’m very pleased they have won a couple of games recently. Long may that continue.”
Labour Assembly Member Bassam Mahfouz, who questioned the panel about the stadium, told the LDRS: “Not only are Londoners being hammered by the worst football deal in Premier League history, signed off by the previous Mayor Boris Johnson, but it now looks like things could get even worse.
