The government's consultation on its proposed approach to
local authority funding reform through the Local Government Finance Settlement
from 2026-27 closed on Friday.
London Councils' submission highlights serious issues within the proposals that risk
dramatically underestimating levels of need for local services in London.
Cllr Claire Holland, Chair of London Councils, said:
“Reforms to council funding are long overdue. It's critical that funding is
distributed fairly and efficiently on the basis of need, but the current
proposals risk dramatically underestimating levels of need in London and other
parts of the country, particularly in terms of deprivation and demand for
children’s services.
“After more than a decade of structural underfunding in
local government, it is more important than ever that councils receive
resources which genuinely match need in their local area. This is vital for
restoring town halls’ financial stability and sustaining hard-pressed local
services in the years to come.”
London Councils has raised particular concerns around the proposed methodology to calculate needs for children's services that could see London boroughs' funding share for such services decrease by £1.5bn.
You can read more about our concerns regarding the children's services foumula in this MJ article; and you can read our detailed briefing on the Fair Funding Review 2.0 proposals here.