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Cash-strapped London council starts crowdfunding drive to pay for green upgrades | Austerity

A south London council is asking residents to invest their own money for a financial return on cycle sheds, new LED street lights and improvements to schools and leisure centres, following major cuts to government funding. requested.

Southwark councilors have turned to a crowdfunding scheme to raise £6m over the next six years to fund climate-friendly projects, amid a financial crisis that has gripped councils across England.

As a creative response to the dual challenges of fiscal constraints and sustaining the investments needed to address the climate emergency, the scheme will offer investors a return of 4.6% next financial year. We plan to raise £1 million.

The overwhelming majority of local authorities in England plan to make deep cuts to services and raise council tax wherever possible to stay financially afloat, despite an additional £600m cash injection from the government. There is.

“That’s certainly the context,” said Emily Hixson, deputy cabinet member for green finance on Labour’s governing council. “Southwark is no different from any other council in the country – we are all struggling with a lack of central government funding and dealing with inflation.

“We are profitable because we are innovative.”

The scheme allows investments from as little as £5 and raised more than £50,000 within hours of its launch on Tuesday. It is available to individuals and businesses regardless of their place of residence and offers a fixed annual return of 4.6% over a five-year period.

Figures released by the Local Government Association on Wednesday show that two-thirds of UK councils are struggling to fill funding gaps this year, leading to funding for neighborhood services such as waste collection, road repairs, libraries and leisure services. planning to reduce.

Parliament estimates it will face a £4bn shortfall in the two financial years from 2024 to 2025, as years of underfunding from central government collide with rising inflation and rising demand for services.

The report warned that 85% of Congress plans to cut costs to balance the budget for the next fiscal year.

Southwark City Council said earlier this month it needed to find savings and efficiencies. Closing a £6.7m budget gap We prepare for the next financial year with increased pressure on services and rising costs. The city also plans to raise the maximum permissible city tax by 4.99%.

Since 2010, the council has lost more than £146 million in government funding in cash terms.

The city’s crowdfunding scheme is managed by Abundance Investment, a financial platform focused on ethical and sustainable community investment projects, which manages a growing number of programs on behalf of local authorities in England. There is.

Since launching the first project with Warrington City Council in Cheshire in 2020, nine local authorities, including West Berkshire, Camden and Cotswold councils, have used the platform to crowdfund their efforts to meet their climate targets. It started.

Mr Hickson said Southwark’s plan would involve lower interest rates for local authorities than borrowing through the government’s Public Works Loan Board, which provides cheap long-term loans to councils to fund local projects. There would also be the benefit of involving residents directly in the council’s climate change emergency planning.

“It’s pretty small. That’s not how legislatures across the country solve budget crises,” Hixson said. “This should allow us to do this in an accelerated time span. These types of projects definitely need to happen.”

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