Responding to the government’s statement on the Fair Funding
Review 2.0, Cllr Claire Holland, Chair of London Councils, said: “Given the
scale of the financial challenge facing London boroughs, these long-overdue
reforms to local government funding will be hugely significant for the future
of the capital.
“From the outset, we have supported the government’s aim of
creating a system that better matches resource to need. We therefore welcome
the decision to use updated deprivation measures that factor in housing costs –
this is a far more accurate approach to measuring deprivation. Housing costs
are undeniably a key determinant of deprivation – not just in London, but
across the country – which in turn drives high levels of demand for council
services.
“Considering the rapid spending increases in service areas
such as temporary accommodation provision, we are also pleased to see the most
up-to-date council spending data will be used to determine funding allocations.
“We remain concerned that the new relative needs formula for
Children and Young People’s Services continues to dramatically underestimate
levels of need in London, despite some minor adjustments. It is vital the
government keeps this untested model under review and monitors its ability to
accurately measure demand.
“We will be working through [the] announcement in more
detail to understand the full implications for boroughs, ahead of provisional
funding allocations being published in December.
“After more than a decade of structural underfunding, rising
costs and growing demand, we know many London boroughs will continue to face
huge financial pressures and are likely to require emergency borrowing. The
government must keep working with councils so we can restore stability to
budgets, help drive growth, and deliver vital local services.”
Later today, the Chancellor, Rachel Reeves, will deliver the
2025 Autumn Budget. You can watch the Budget live on the Parliament
website here. London Councils will be updating members and responding to the
main implications for London local government following the announcement.