The leaders of the three councils say they will use legal powers to formally challenge the Fairer Funding Review but a local Labour group called it a “political stunt”
Three Conservative London councils have written to the Prime Minister to ask him to review plans to slash their funding by millions of pounds.
The Fairer Funding Review, brought in by Sir Keir Starmer, will change the way that council grants are calculated. Some London councils are set to lose around £100million in Central Government funding because of the changes.
The leaders of three of the worst affected London councils — Westminster, Kensington & Chelsea and Wandsworth — have said that they will use a legal power to formally challenge this decision.
Dated August 20, the letter reads: “Your announcement [on devolution] pledged to promote growth in every postcode by letting local authorities keep the proceeds of taxes. But the reverse is happening here – every postcode is being punished, every postcode is facing higher local taxes.
“It would seem that Labour’s devolution only entails higher taxes and never keeping taxes down. True localism and decentralisation would allow for tax competition between local areas: allowing for low taxes, if local voters wish, supporting the taxbase through higher economic growth and attracting residents and businesses to lower tax areas.”
The letter was signed by Leader of Kensington and Chelsea Council, Cllr Elizabeth Campbell, Leader of Westminster City Council, Cllr Paul Swaddle OBE, and Leader of Wandsworth Council, Cllr Robert Morritt.
Just days before the letter was sent, senior Conservative politician Sir James Cleverly, who has launched a bid to run for Mayor of London, accused the Prime Minister of “waging a war on London” and pursuing a “very anti-London agenda”.
Speaking to LBC on Sunday, he said Burnham was “stripping hundreds of millions of pounds out of the budget of London councils”.
Cllr Paul Swaddle OBE said: “James Cleverly is right. The Government’s Fairer Funding Review is stripping hundreds of millions of pounds out of London councils, including here in Westminster.
“Andy Burnham needs to explain why Londoners — who already pay some of the highest taxes and housing costs in the country — are being asked to subsidise a political fix elsewhere.”
Neither the Prime Minister’s office or the Ministry of Housing, Communities and Local Government responded to the Local Democracy Reporting Service’s request for comment.
Kensington & Chelsea, Westminster and Wandsworth Councils are set to lose £108million, £100million and £84million respectively over the next four years. Residents have been warned there will be council tax rises and cuts to services in order to balance the books.
Cllr Robert Morritt, Leader of Wandsworth Council, said: “Wandsworth residents deserve a fairer deal. Our core government funding has been cut by 40% while demand for vital local services continues to grow.
“Through our intended proposal under the Sustainable Communities Act we are arguing for a system that gives communities a stronger voice and councils the resources they need to deliver for residents.”
Leader of the Westminster Labour Group, Councillor Ellie Ormsby, said that the pressure on councils had been building over the last decade.
She said that successive Conservative governments had delayed the Fairer Funding Review, leaving councils on a funding ‘cliff edge’.
‘Council should focus on solutions — not political stunts’
Cllr Ormsby said: “We are seeking clarification from council officers on the prospects of success of the legal challenge the Conservatives are proposing.
“Of course, we will always support efforts to secure the best possible deal for Westminster, but spending significant sums of taxpayers’ money on lawyers for a challenge with what appears to be a negligible chance of success risks simply wasting money that could be better spent protecting local services.“Westminster residents need a council focused on finding practical solutions to the financial challenges ahead – not political stunts from a party with a record of wasting millions of pounds that are unlikely to deliver a penny more for local services.”
She added that Westminster Tories should be trying to secure a share of an overnight visitor levy to raise more money for the borough.
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