The government’s “devastating” proposals to modify council funding have prompted one borough in southwest London to announce its intention to pursue legal action.
Richmond Council has asserted that the proposed revisions to funding regulations could result in a loss of up to £45 million annually — accounting for more than 90% of its current budgetary allocation.
If this scenario unfolds, Richmond would stand as the most adversely affected local authority in England, although the government has contested this claim, stating it “does not recognize the figure.”
The Ministry of Housing, Communities and Local Government (MHCLG) contends that the changes aim to create a fairer and more straightforward funding mechanism.
In a letter to Secretary of State Steve Reed, the council detailed its reasons for opposing the consultation process associated with the Fair Funding Review 2.0, the government’s initiative to redistribute funding among local authorities in England starting in the fiscal year 2026/27.
Gareth Roberts, the Liberal Democrat leader of the council, highlighted that the authority has saved nearly £50 million since 2018 by enhancing services, streamlining operations, improving procurement practices, and generating revenue.
He expressed concern that the proposed funding formula would adversely affect local authorities that responsibly manage their budgets.
Roberts stated, “We are advocating for a funding arrangement that acknowledges the genuine needs of our community. This legal challenge is about upholding our principles and ensuring every resident’s voice in Richmond is heard.”
The council has requested the government to disclose the impact models used to assess the potential human consequences of these changes, including implications for elderly residents who depend on social care, children with complex needs, and low-income families.
Roberts remarked that it is “unprecedented” for a government to give councils less than three months of formal notice before enacting cuts of this magnitude, labeling it “bordering on irresponsible.”
He provided examples of how Richmond has effectively managed its finances, such as sharing administrative staff with Wandsworth Council.
“We’re not aiming to accumulate large sums of money merely to safeguard our revenue. Our goal as a council is to preserve services for our residents,” he clarified.
Jim Millard, the council’s finance member, characterized the challenge as a “test of courage and leadership.”
“We owe it to our residents—particularly the most vulnerable—to contest a process that has been hurried, non-transparent, and profoundly unjust,” he asserted.
An MHCLG representative commented that the proposed reforms would ensure “communities that have been historically overlooked will receive the essential public services they rightfully deserve from their local authorities,” as reported by the Local Democracy Reporting Service.
Other councils in London have voiced concerns regarding the anticipated impact of the review, with Kensington and Chelsea Council projecting an £82 million reduction in funding between now and 2030.
