Helping London's Boroughs Redefine Financial Sustainability
London boroughs are operating in a financial environment where demand, cost and complexity are rising faster than funding. Collectively, boroughs faced an estimated £500 million funding gap in 2025-26, with eight boroughs requiring Exceptional Financial Support. The Fairer Funding Review, intended to rebalance core funding, was unlikely to resolve constrained funding for most boroughs in the medium term.
Against this backdrop, Society of London Treasurers (SLT) commissioned 31ten to answer a question finance leaders were repeatedly confronting without a shared answer: what level of service, risk and outcome is genuinely affordable over the next decade?
The brief was to develop an evidence-based framework that would help Councils articulate a sustainable suite of council services and:
- Reflected local conditions and priorities rather than imposing a single national benchmark,
- Took account of emerging discussions on Local Government Reorganisation (LGR) and evolving London governance, and
- Aligned with realistic future funding and fiscal constraints.
Our Role
31ten was engaged to design and deliver the full evidence base and framework, structured across three phases:
1.Evidence and Data Analysis
We analysed financial, spend and performance data across all London boroughs to identify authorities consistently achieving strong outcomes while operating at average or below-average levels of expenditure in key service areas, including Adult Social Care, Children’s Social Care and Housing.
Using our targeted performer methodology, we shortlisted councils demonstrating this balance and undertook detailed desktop reviews of their financial strategies, spending patterns and transformation activity between 2022 and 2025.
2.Engagement and Validation
We conducted structured engagement with six London local authorities and 26 stakeholders – including Chief Finance Officers, Directors of Children’s/Adults’ Services, and Strategic Directors. These discussions tested our initial findings, explored the practical realities behind different financial approaches, and identified the organisational conditions that enable sustainable change.
3.Framework Development
We synthesised these findings into a practical, tested tool – combining a taxonomy of financially sustainable initiatives with a set of organisational enablers – designed to be applied repeatedly across budget cycles, service reviews and transformation planning, not used as a one-off diagnostic.
Alongside the framework, we designed a RAG assessment methodology that enables savings initiatives to be consistently evaluated against value, deliverability and risk, supporting more transparent prioritisation and decision-making.
Key Findings
There is no single, objectively correct “financially sustainable” level for all London councils. Sustainability sits at the intersection of cost, quality, risk and outcomes, and is shaped by each council’s local context, risk appetite and history. Based on the Councils we engaged with and the case studies we’ve included in the report, show that different councils facing similar pressures may make very different, but equally rational choices for their context when trying to implement sustainable practices.
What distinguishes success is less the strategy chosen than whether a council has the organisational conditions in place to sustain it: consistent leadership, financial discipline, workforce stability, reliable data, and appropriate risk tolerance.
What We Delivered
We developed a Sustainability Framework built around two complementary components.
- Five categories of initiative councils use to manage demand, cost and income: Demand Management, Market Management, Productivity & Efficiency, Income Maximisation, and Asset & Capital Levers
- Eight enabling conditions that determine whether those initiatives can be sustained in practice: Leadership & Governance, Culture & Practice, Financial Management & Planning, Workforce Capacity & Capability, Data/Systems/Technology, Decision-Making & Risk Appetite, Partnerships & System Integration, and Estates & Infrastructure
This was supported by a RAG methodology for scoring individual savings initiatives against value, deliverability and risk, and a four-step application process so the framework could be used directly in budget cycles rather than filed as a one-off report.
Key Outcomes
The work provided London boroughs with a shared, evidence-based approach to discussing financial sustainability and making difficult strategic choices.
As a result:
- Finance leaders gained a common language for explaining the balance between cost, quality, risk and outcomes to elected members and stakeholders.
- Boroughs can benchmark strategic decisions against peer authorities facing similar financial challenges.
- Finance functions are better positioned to act as strategic partners, connecting financial planning, service transformation and organisational delivery.
- The Society of London Treasurers strengthened its evidence base for sector-wide advocacy on structural issues such as funding reform, Adult Social Care market pressures and increasing SEND demand, where solutions extend beyond individual authorities.
Contact
