Tory mayor is a big risk for City says Balls

The Schools Secretary and former City minister declared that the Tory candidate for Mayor had no track record in managing big budgets and could be "duped" by private sector negotiators for Crossrail and other major transport projects.

Speaking alongside Ken Livingstone for the first time on the campaign trail, Mr Balls also said he worried about Mr Johnson's ability to "fight hard" for Londoners in negotiations with the Treasury.

Mr Balls said that even some of Mr Johnson's supporters in the City were "publicly and privately" worried about his ability to manage City Hall's £11 billion budget and the huge transport projects for which the Mayor was responsibly.

"Boris Johnson would be a major risk for the economy and the City of London because decisions taken by the Mayor on planning and transport are crucial to the financial services of this capital.

"If you get those decisions wrong, if you negotiate a bad deal, if you can't make your sums add up, if you get duped by wily private sector negotiators, then that will be a disaster," he said.

Mr Balls said that when he was City minister he was impressed that in the capital, and whenever he travelled abroad, Mr Livingstone was regarded as a tough negotiator and ambassador for London.

"Boris Johnson has no serious experience or track record of managing substantial budgets or any previous commitment to this city. London is doing very well right now, but New York, Frankfurt, Mumbai and other cities are looking all the time at how to exploit any advantage and are looking at every issue.

"London cannot afford to make any mistakes." Mr Balls conceded that when he had been Gordon Brown's chief economic adviser at the Treasury in Labour's first two terms, Mr Livingstone had often been at odds with the government.

"But I can tell you we never came across a tougher negotiator at the Treasury than Ken Livingstone.

"In my seven or eight years at the Treasury, particularly on the Tube, we knew Ken was the person who was going to fight his corner hardest."

The minister had joined the Mayor in Camberwell to unveil a new £80million pledge to provide extra youth facilities to keep young people off the streets and away from crime.

Mr Balls, speaking at the Hollington Club for Young People, endorsed Mr Livingstone's promise to fund youth clubs, sports schools, music studios and "safe places" to keep teenagers off the streets.

The Government has already given City Hall some £79 million to fund such facilities over the next two years.

The Mayor announced today that he would find a similar amount from his own budget to keep facilities going for a further two years, until 2012.

The pledge, which will be paid for by the London Development Agency, means that nearly £160 million will be spent on youth activities throughout a Livingstone third term if he wins. In a clear indication of how seriously the Government is treating the mayoral race, Mr Balls is the third Cabinet minister in five days to appear alongside Mr Livingstone on the stump, after Gordon Brown and David Miliband.