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Your weekly London local government update

13 Aug 25

London needs fair funding 

The government's consultation ( [link removed] ) on its proposed approach to local authority funding reform through the Local Government Finance Settlement from 2026-27 is due to close this week (15 August).

London Councils’ analysis has highlighted some serious issues within the 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 resource matches need, sustaining hard-pressed local services, and restoring local government’s financial stability.

This includes calling for the government to re-examine proposed changes to the way it assesses need for children’s services, as research suggests the reforms fail to account for housing poverty when calculating deprivation and could have a “devastating impact” on budgets.

London Councils’ analysis indicates £1.5bn of funding share could be redistributed away from the capital as a result, with all but one London borough seeing their funding share decrease.

Chair of London Councils Cllr Claire Holland, said: “We welcome the government’s intention to reform council funding since this is long overdue, and it is critical that funding is distributed fairly and efficiently on the basis of need.

"However, it’s clear there are serious issues with the proposed children’s services formula, which risks dramatically underestimating levels of need in London and other parts of the country. This would have a devastating impact on our ability to deliver vital local services, particularly for our most vulnerable children and young people.

“A more accurate approach to assessing local levels of need is in everyone’s interests. It will help create a funding system that is robust, provides councils with the resources they need and – following 14 years of structural underfunding – restores long-term financial stability to boroughs and the wider local government sector.

“The consultation is an essential opportunity to reexamine the formula, and we are keen to work with the government to develop a model that is accurate and robust.”

You can read our briefing on the proposed funding reforms here. ( [link removed] )

Case studies in prevention

To celebrate 60 years of the London boroughs, each week, London Councils is sharing prevention case studies highlighting how preventative action by London boroughs is helping to save money and improve the lives of their residents.

This week, our case study is from LB Islington where early intervention and prevention tactics are improving the safety and prospects of vulnerable young people. Islington's Youth Justice System recently received an "outstanding" rating from His Majesty's Inspectorate of Probation.

You can read Islington's case study in full on our LinkedIn page here. ( [link removed] )

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In the news this week...

London councils to lose millions in funding despite high poverty levels

The Guardian ( [link removed] )
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London councils 'biggest losers' under government plans to change funding
ITV News ( [link removed] )
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Inner London to lose out in funding rebalance

BBC News ( [link removed] )
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What topics are you interested in? Click here to let us know ( [link removed] )

London Local Government 
Directory

You can find contact details for every councillor in London in our London Government Directory here ( [link removed] ).

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London Councils is the collective of local government in London, the 32 boroughs and the City of London.
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