Council leaders across north-east London say they feel their funding needs are not being properly addressed, reports Sebastian Mann, Local Democracy Reporter
Inset image credit: clubfoto via Canva
North-east London council leaders have said the level of government funding for the coming year is “disappointing” and “inadequate”.
Each December, the central government outlines how much funding each local authority in the UK is expected to receive in the coming financial year.
A total of £69billion has been put aside to help councils with commitments like social care and housing, which are becoming increasing burdens across London. A further £515m will be meted out to help offset the increases to how much National Insurance employers pay.
But despite their best efforts, council leaders across north-east London say they feel their needs are not being properly addressed.
Havering Council should receive a funding settlement of £40m, up from £39.5m the previous year.
Through a variety of grants, the town hall is expecting a total increase of £10m, but council leader Ray Morgon said it would be “wiped out” by tax hikes.
He said in a statement: “The recent announcement showed through a variety of grants Havering will receive around £10m, but this will be wiped out by the government’s increase in National Insurance contributions and increases in the National Living Wage.
“The phrase, ‘Give with one hand and take back with the other’ springs to mind.”
He said Havering was being “penalised” despite making millions in cuts, having declared effective bankruptcy last February. The town hall was saved by a £32.5m government, but will need to borrow more to balance 2025’s budget.
A spokesperson for the Ministry of Housing, Communities and Local Government said: “Despite the inheritance we have been left, the government is focused on fixing the foundations of local government – injecting £69bn into council budgets across England, including London, to help them drive forward the government’s plan for change.
“We have also announced an additional £515m for local government to manage the impact of the employer National Insurance changes and we are providing greater stability to areas by moving towards multi-year funding settlements and ending competitive bidding processes for pots of funding.”
Funding for local governments has significantly declined since 2011.
Councils’ funding per person has fallen by a real-term average of 26% across the UK, according to the the Institute for Fiscal Studies.
In 2010, Havering received a revenue support grant of £70m, the council said. This year, it will be closer to £2m.
Redbridge Council was given a total funding boost of £12.9m for 2025/26, officials say, but that figure presupposes a £7.8m hike in council tax and business rates.
Kam Rai, the Labour leader of the council, said the £71.2m in funding may not be enough. The town hall was allocated £70.4m for the previous financial year.
The council will receive £2.7m to tackle homelessness, which he called an “inadequate” amount of money.
He told the London Standard: “This is a mere drop in the ocean considering we spent £52m on temporary accommodation last year.
“There is a housing emergency, and it’s fundamentally broken in London. We require radical reform to the rental market so tenants can plan for the longer term and not constantly fear eviction and huge rent rises.”
Deputy leader Vanisha Solanki said the settlement “did not go far enough” to address critical issues in the borough, including population growth and deprivation.
She said Redbridge “needed a fairer funding deal” and councils like hers were being overlooked.
Speaking at a cabinet meeting in December, she said: “Redbridge has higher than average poverty levels and a rapidly growing population, but despite these demands, we remain one of the lowest funded boroughs per head in London.”
The cabinet member for finance added: “The structural unfairness of the funding grant continues to go unaddressed.”
Fellow Labour council leader Grace Williams, who heads Waltham Forest Council, said the authority would “make the case for fairer funding” that reflected the “real levels of need” in the borough.
She said she was “very pleased” with the £99.9m provisionally allocated for the town hall – up from last year’s £98.7m – but the council would need to take “tough decisions” to be on “firm financial footing”.
After identifying a potential overspend of £18m, the town hall has been looking to cut staffing levels and “non-essential” daily spending.
Cllr Williams added: “For nearly 15 years, local government has been asked to deliver more services, to more people, for less money and with fewer resources, while every day our residents continue to face the real world impact of the cost-of-living crisis.”
Despite the relative increases across north-east London, these figures pale next to Newham Council’s £169m or Hackney’s £166m.
But even then, Hackney mayor Caroline Woodley said it “still doesn’t cover what we need” to address the “increasing demand” for services.
Cllr Louise Gittins, chair of the Local Government Association, said the extra funding would help councils “meet some but not all of the pressures they face”.
She said it was “vital that all views are considered,” and the government “ensures all councils have adequate resources next year to provide the services their communities rely on every day and can meet growing and complex cost and demand pressures”.
The settlements will be agreed before the councils approve their budgets in February.
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