Labour cuts funding for low-tax, high-performing London councils

The latest Fair Funding Formula announced by Whitehall will eliminate the £84 million grant that currently supports councils like Wandsworth, which has historically offered the lowest council tax in England. Conservative-run authorities in Westminster, Windsor and Maidenhead, and Chelsea & Kensington are among those targeted, while Labour-run Hammersmith & Fulham joins them as collateral damage. A prior Labour council administration exhausted a £206 million reserve, creating a £54 million structural deficit that cannot be covered by reserves.

The funding cut will force unprecedented service reductions for residents in these affluent boroughs. Meanwhile, the redirected money will benefit Labour-controlled councils such as Birmingham, Manchester, and indebted boroughs like Haringey, Newham and Enfield. The Business Rates Reset further limits the amount of local business rates these councils can retain, compounding financial pressure.