In many ways, London represents a triumph of liberalism.

London is a city where people from all backgrounds come to make their home. A city of dynamism and enterprise, closely intertwined with the global economy. A city of remarkable history and forward-thinking culture. A city thriving as a cosmopolitan melting pot, with strong communities and individuals free to be themselves.

It is for precisely these reasons that certain politicians denigrate the capital, portraying it either as a suspicious, crime-ridden hellhole or an effete hub of snooty, overprivileged elitism. Or sometimes all of these at the same time.

I vehemently disagree with their illiberal views, but at least I can understand why reactionary populists target the capital.

What perplexes me, however, is the government’s attitude.

London is undoubtedly a UK success story. In economic terms alone, the capital accounts for almost a quarter of the UK’s entire economic output. London creates a surplus for the Treasury of upwards of £40 billion – providing much-needed money for housing, education, social care, and other public services across the country. London’s wealth creation is vital to the UK’s prosperity.

But ministers and their officials give every impression that their feelings towards the capital are lukewarm, at best.

In recent years we have seen the explicitly anti-London policies associated with ‘levelling up’, leaving London excluded from various funding streams and opportunities.

Although ‘levelling up’ is no more, the current government still seems to prefer highlighting investment it makes outside the capital, and reluctant to acknowledge both London’s needs and crucial contribution to the UK.

London’s devolution settlement is 25 years old and in need of modernising. Compared to other major cities around the world such as Paris and New York, London’s devolved powers are fairly pitiful. Greater Manchester and the West Midlands have more advanced devolution arrangements than the capital. Why has London been left behind?

Those of us serving in London local government are especially concerned by plans to reform the council funding system, which look set to leave London as the major loser when implemented next year.

Although reform is long overdue and the government is right to prioritise funding towards areas of deprivation, flaws within the government’s proposals mean its deprivation measures are not robust.

For example, the government’s preferred deprivation measure gives ‘road distance to a post office’ equal weighting to levels of homelessness – suggesting these factors have the same level of impact on deprivation in a community.

London is in the midst of the most severe homelessness emergency in the country. One in 50 Londoners is currently homeless and living in temporary accommodation. One in four Londoners live in poverty once housing costs are taken into account. But the impact of homelessness and housing pressures on deprivation are not sufficiently recognised in the government’s plans.

Absurdities such as this mean the funding reforms will not achieve what they have promised, and hard-pressed councils in London and elsewhere won’t receive the funding they need.

London Councils’ analysis suggests boroughs in the capital will receive £700m less than they would under current funding arrangements.

Considering that current arrangements already fail to meet London’s funding needs – boroughs face a shortfall of at least £500m this year – the financial future looks beyond bleak.

A budget squeeze on this scale would inevitably have significant implications for Londoners’ local services. This is hugely painful for residents – but it will also impede boroughs’ ability to build homes, create jobs, and other priorities we share with the government. London businesses are as alarmed as we are, as they know how important local services and infrastructure are for supporting economic growth.

London boroughs are pushing for a change in the government’s approach.

We do not expect special favours – but it is in no one’s interests to jeopardise the capital’s success. Instead, boroughs hope to see fair funding for London’s local services in recognition of the pressures they are under. We also want to see more ambition for devolving powers to London – and indeed to communities throughout the country – so that we are better placed to tackle local challenges.

Despite what the naysayers claim, London is an integral and proud part of the UK. The government should show it understands this and give us the support we need to maximise our contribution to a better future for the entire country.

* Cllr Gareth Roberts is leader of Richmond Council, a member of the London Assembly, and vice-chair of London Councils.