Funding for Councils

London Councils, representing all local authorities in London, is urging the government to ensure its Fair Funding Review 2.0 proposals distribute funding to local authorities fairly and efficiently on the basis of need. London Councils’ analysis here highlights serious issues within the Government’s proposals that risk dramatically underestimating levels of need for local services in London. 

London Councils is calling for a more accurate approach to assessing local levels of need, which is key to ensuring available resource matches need, sustaining hard-pressed local services, and restoring local government’s financial stability. 

The IFS has published its analysis here of the implications for Councils in various areas of the proposed reforms to the system which they conclude could create big ‘winners’ and ‘losers’, as in the following extract.

• Inner London, particularly its western parts, is set to be by far the biggest loser from the reforms. Even with the funding floors, Camden, Hammersmith & Fulham, Kensington & Chelsea, Wandsworth and Westminster can expect their overall funding to be 11–12% lower in real terms in 2028–29 than this year, even if they increased their council tax by the maximum allowed (5%) each year.
• In contrast, outer London will fare much better, on average. Indeed, several outer London boroughs (such as Enfield, Havering and Hillingdon) are set to be among the biggest winners from the reforms, and could see their overall funding increase by around 20% in real terms over the next three years, if they increase council tax by 5% each year.