LDA budget to be slashed by Brown
Friday, 3 July 2009 12:00 AM
The prime minister is set to slash £21 million from Boris Johnson's development budget to fund the social housing programmes announced in his manifesto, it has been revealed.
The government plans to take money out of the country's nine regional development agencies to fund the housing programmes announced in Building Britain's Future on Monday.
The mayor of London called the move "completely unacceptable" and warned it will "severely disrupt" the London Development Agency's ability to deliver on his priorities for London's economic development.
In a letter to business secretary Lord Mandelson, Johnson accused the government of "ignoring" the fact that he was elected to run the capital.
"I do not have difficulty with the government's right to review national priorities and, for example, decide that money previously assigned and announced for economic development should now fund housing", he said.
But the mayor added that London's "unique governance arrangement" meant that it should be exempt from the cut.
The cuts will include £4-5 million from the LDA in the current financial year, and £17m in 2010-11, according to Johnson.
In his letter, the Conservative mayor also requested an end to raids on budgets after they had been agreed, pointing out this has already occurred four times in the past 18 months.
He said that further cuts on top of the previous four cuts and the reprioritisation undertaken recently of budgets for the Olympics in 2012 would "almost certainly mean the LDA's having to go back on funding commitments."
The LDA is already under financial pressure after identifying a blackhole of between £60-100m in its finances, which is expected to affect future commitments planned by the mayoralty.
The Department for Business, Enterprise and Regulatory Reform has yet to comment.
Newsletter sign up