Sir Sadiq Khan has urged Rachel Reeves to give London more funding in this week’s spending review, suggesting she is not willing to give the capital any money for transport projects.
The London mayor has fought for support for several transport requests, as well as the power to introduce a tourist levy. He has also called for a substantial increase in funding for the Metropolitan Police.
But sources close to Sir Sadiq now say it would be “unacceptable” if London is not given the required money to carry out the projects.
In a rare attack on the Labour government, they warned the chancellor now to return to the “anti-London agenda” pursued by Conservative governments.
A City Hall source told The Independent: “Sadiq will always stand up for London and has been clear it would be unacceptable if there are no major infrastructure projects for London announced in the spending review and the Met doesn’t get the funding it needs.
“We need backing for London as a global city that’s pro-business, safe and well-connected.”
The source said a “return to the damaging anti-London approach of the last government would harm London’s vital public services and jobs and growth across the country”.
They added that the way to support the rest of the UK is not to level down London, adding that “when London does well, the whole country does well”.
Concerns in City Hall are centred on the fear London will not receive any of the £113 billion in infrastructure spending unlocked by the chancellor’s changes to her fiscal rules.
The mayor’s main priorities ahead of the spending review included the Docklands Light Railway (DLR) being extended to Thamesmead and the extension of the Bakerloo underground line.
Ms Reeves has openly discussed prioritising spending outside of London and the south east in her spending review, altering the Treasury’s investment rulebook to free up cash for the North and Midlands.
The chancellor has already unveiled more than £15 billion of spending pledges for mayoral authorities in Tyne and Wear, Greater Manchester and the West Midlands, along with a renewed tram network in South Yorkshire and a new mass transit systems in West Yorkshire.
And she has said Britain “cannot rely on a handful of places forging ahead of the rest of the country”.
The investment drive comes after Ms Reeves promised to review the government’s Green Book, which is used to judge the costs and benefits of projects, to “provide objective, transparent advice on public investment across the country, including outside London and the south east”.
The Treasury was asked to comment. The row between City Hall and Ms Reeves comes as every Whitehall department has signed off on the spending review plans bar the Home Office, which is locked in last-minute negotiations over its budget.
While the chancellor is expected to announce above-inflation increases in the policing budget when she sets out her spending plans for the next three years on Wednesday, she is also set to push through a squeeze on other areas of the Home Office’s budget.
Downing Street has now become involved in the talks as they come down to the wire.
Last week, Ms Reeves acknowledged she had been forced to turn down requests for funding for projects she would have wanted to back, in a sign of the behind-the-scenes wrangling over her spending review.
The Department of Health is set to be the biggest winner, with the NHS expected to receive a boost of up to £30 billion at the expense of other public services.
Meanwhile, day-to-day funding for schools is expected to increase by £4.5 billion by 2028-9 compared with the 2025-6 core budget, which was published in the spring statement. Elsewhere, the Government has committed to spend 2.5 per cent of gross domestic product on defence from April 2027, with a goal of increasing that to 3 per cent over the next parliament – a timetable which could stretch to 2034.
Ms Reeves’ plans will also include an £86 billion package for science and technology research and development.
