In June, 16 year old granddaughter is going on a school excursion to London. Accommodation will be in a college dormitory and food and trips paid in advance. I have promised to give her spending money.

I am out of touch with UK costs especially London. Request recommendations on how much per diem to give her.

Depends on if she wants to buy momentous of the trip and gifts for the family.
£25 a day minimum.

Depends how many days and what they are doing. London is expensive 

With trips, food and accommodation covered that really only needs optional shopping for herself and gifts.  £30-50/day would be more than adequate.  More importantly for a 16 year old will be to make sure she has a roaming data package on her phone!