Four London boroughs have launched a coordinated legal challenge against ministers over a government funding shake-up they say will strip hundreds of millions of pounds from their budgets.
Wandsworth, Westminster, Kensington and Chelsea, and Richmond councils all submitted formal proposals under the Sustainable Communities Act 2007 today, in an effort to persuade the Government to reconsider its Fair Funding Formula 2.0 plans.
The seldom-used law gives local authorities the right to submit proposals to Whitehall asking for legislative and other barriers to be removed where they stop councils improving the sustainability of their areas. Crucially, the Secretary of State must consider each proposal and decide whether to accept all or part of it, giving reasons for the decision.
The numbers behind the row
The four boroughs say the figures make the case on their own. Under the new formula, Wandsworth’s funding would be cut by £84m a year by 2029 — more, the council points out, than the whole of its spending on parks, libraries, leisure centres, bin collections and street cleaning combined.
Westminster is facing a funding gap of £160m by 2029, while Kensington and Chelsea’s funding would be cut by £108m over four years.
Richmond’s annual core funding would be cut by £29m by 2028/29, which the council says is around 58 per cent of its core funding allocation — the largest percentage cut in London. Over a four-year period, Richmond would lose £102m under the changes.
“The furthest thing from fair”
Kensington and Chelsea’s leader, Cllr Elizabeth Campbell, described the Fair Funding Review as the “furthest thing from fair”.
She said: “This is unfair funding, plain and simple, and an unprecedented reduction that will mean incredibly tough decisions and stark consequences for our residents. I have been clear from the beginning that I will exhaust every avenue to challenge this decision. As Leader, I could not stand in the Council Chamber and announce decisions affecting residents’ lives knowing there was more we could have done to persuade the Government to think again.”
Cllr Paul Fisher, Westminster’s Cabinet Member for Value for Money and Finance, was scheduled to approve his council’s submission today. Westminster’s budget pressures are already biting — the council is cutting 520 jobs in the biggest staff cull in its history as it tries to save money.
What the Sustainable Communities Act actually does
The 2007 Act was designed to give communities and councils a direct line to ministers: a council can submit a proposal identifying a law, regulation or policy that gets in the way of making its area more sustainable, and the Secretary of State is legally obliged to consider it and give a reasoned answer. Councils must first consult residents before a proposal goes in.
It is a significant choice of route. Rather than lobbying or a press campaign, the four boroughs are using a statutory mechanism that forces a formal ministerial response — a signal of how seriously they view the scale of the cuts. An update from Kensington and Chelsea on 14 October spelt out the position: “The Secretary of State must consider our proposal and decide whether to accept all or part of it, giving reasons for the decision.”
The funding row behind the proposals
The Fair Funding Review is the Government’s attempt to rewrite how money is distributed between councils in England, replacing a system that even ministers admit is decades out of date. Fair Funding Formula 2.0 is the updated version of that work.
The four boroughs argue the new needs-based calculations punish inner-London authorities with high costs and complex populations. Their warning is that losing sums of this size would force cuts well beyond back-office savings — into frontline services, community facilities and housebuilding programmes that are already under strain.
That concern lands as London’s boroughs are pressing ministers for more cash elsewhere too — councils have said they could build 50,000 new council homes if Whitehall finds the money.
What happens next
With the proposals now submitted, the ball is in the Secretary of State’s court. Each submission must be considered on its merits, with a decision — and the reasons for it — made public. The four councils will be watching closely: if ministers reject the proposals, the boroughs have made clear they will not stop there, with Campbell pledging to “exhaust every avenue” to challenge the settlement.
