England's urban local authorities might have assumed their longest-running prayer had been answered when the Government launched the Fair Funding Review 2.0 in the summer.
The Special Interest Group of Municipal Authorities (SIGOMA), has for years been campaigning for their members - urban councils mainly in the North and the Midlands, but with a few in the south coastal regions - to get a bigger slice of the local government funding cake.
But SIGOMA may have breathed out prematurely when the consultation landed in June. The fiscal horizon for their councils is looking distinctly stormier in the run up to this week's expected publication of the Government's local government finance policy statement and the response to the consultation on the fair funding review.
Late changes to the fair funding review are expected to cost metropolitan local authorities £121m in 2026-27, according to estimates from financial firm Pixel seen by The MJ. The change to the Index of Multiple Deprivation (IMD) resulting from a poverty rate calculation change that includes housing costs,
SIGOMA's new Parliamentary chair, Labour MP for Doncaster Central Sally Jameson, is urging the Government to reflect on the impact of the last-minute changes. She says the addition of housing costs as an indicator of deprivation is ‘set to strip millions from deprived urban areas in 2026/27. That's a considerable setback for councils already grappling with tighter budgets and rising demand'.
She adds: ‘For too long, councils in the North and Midlands bore the brunt of austerity, with real-terms cuts far deeper than those faced by more prosperous areas. SIGOMA councils alone have faced funding reductions 25% worse than the national average, and four times worse than shire counties. These cuts have hollowed out local services and left communities struggling to access the support they need.
A former prison officer turned parliamentarian, Jameson took over her SIGOMA role in September from MP Marie Rimmer. Jameson's Doncaster seat gives her a close-up view of the electoral threat posed by Reform UK. While Labour's Ros Jones kept the position of directly elected mayor of Doncaster, Reform UK now has an overall majority on the council, winning 37 seats in May compared to Labour's 12 and the Conservatives' six.
‘Once again, funding is being redirected away from the Midlands and the North, and towards more affluent areas in London and the South. We urge the Government to consider the impact of these changes in the upcoming funding reforms, and recognise the needs of our councils and give them the tools to build a better future.'
SIGOMA members are not on their own in feeling disgruntled. Pixel say inner London authorities will also be hit, by £22m. And in outer London, Richmond upon Thames LBC has begun the process for legal action against the proposed reforms, arguing that it would be ‘the worst-hit [council] in the entire country' and could ‘lose up to £45m per year – over 90% of its funding'.
SIGOMA has strongly welcomed the introduction of the new un-ringfenced Recovery Grant to areas with greater need and demand for services, and Jameson praises the Pride in Place Impact Fund announced by the Government last month. She tells The MJ: ‘I know in Doncaster the Pride in Place Impact Fund is going to be £61.5m of capital spend, which is going to make a real difference in communities.'
But she agrees that much work lies ahead to ensure residents ‘feel like local government is in a sustainable place again and is able to deliver all the services that it wants to and that people rightly want and deserve.'
A former prison officer turned parliamentarian, Jameson took over her SIGOMA role in September from MP Marie Rimmer. Jameson's Doncaster seat gives her a close-up view of the electoral threat posed by Reform UK. While Labour's Ros Jones kept the position of directly elected mayor of Doncaster, Reform UK now has an overall majority on the council, winning 37 seats in May compared to Labour's 12 and the Conservatives' six.
Jameson says: ‘We kept hold of the city mayor, but we lost a huge number of Labour councillors. I'm acutely aware of the challenge that Reform UK pose. I'm also confident that we could rise to meet it.
‘When it comes to local government, I think when you've had 15 years of a lot of councils, particularly SIGOMA councils, barely being able to pay for statutory services, never mind anything else, people are rightly at the point where they feel like things aren't working for them.'
She concludes that the Labour Government ‘absolutely knows and recognises that, because a lot of these areas are represented by Labour MPs, and Labour ministers as well'.
‘It's a complete and absolute priority that we get to the end of this term with people looking back and saying that Labour have delivered. There's a long way to go, and there's a lot of space for us to demonstrate to people that we can do enough for them, whether that's in wider public services, but also in terms of local government.'
Financially, the stakes for councils surrounding the Government's response to the fair funding consultation couldn't be higher. There are local elections next May in all London borough councils and in a swathe of SIGOMA councils. It remains to be seen how the fiscal trade-offs will play out politically for Labour.
