Inner London is expected to be the biggest loser ‘by far' from the Government's proposed fair funding reforms, a study by the Institute for Fiscal Studies (IFS) think-tank has calculated.
A report by financial experts at the think-tank found Camden, Hammersmith & Fulham, Kensington & Chelsea, Wandsworth and Westminster LBCs would be hit the hardest and could expect their overall funding to be up to 12% lower in real terms in 2028-29 than this year.
Outer London is expected to do much better, with several boroughs, such as Enfield, Havering and Hillingdon LBCs, being among the biggest beneficiaries of the reforms. Their overall funding could increase by around 20% in real terms over the next three years.
Outside the capital, councils in the East Midlands are likely to have the biggest real-terms increases in overall funding over the next three years (15% in real terms), followed by Yorkshire & the Humber (12%).
Rural areas, which had feared losing from the reforms, may fare better than expected. The average change in funding for the least densely populated 10% of council areas is expected to be in line with the national average over the next three years.
Kate Ogden, a senior research economist at the IFS and an author of the report, said England had lacked a ‘rational system of local government funding' for up to two decades and so the proposed reforms were ‘welcome'.
She added: ‘But the changes will sting for those councils that are assessed to currently receive too high a share of the overall funding pot and so which lose out from moves to align funding with assessed spending needs.'
