London Boroughs: Financial Support

Lord Bailey of Paddington Excerpts

Monday 3rd November 2025 Lords Chamber

Asked by

[Lord Bailey of Paddington]

To ask His Majesty’s Government what plans they have to provide further financial support to London boroughs.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)]

My Lords, we will deliver fairer funding for all local authorities, including in London. This financial year, we made available up to £13.35 billion of core spending power for London. The spending review provides over £5 billion of new grant funding over the next three years for local services that communities rely on. More details on the upcoming multiyear settlement and the Government’s response to the fair funding review will be published later this year.

[Lord Bailey of Paddington (Con)]

I thank the Minister for her Answer. Due to rising demand, London boroughs have overspent on children’s social care by £150 million annually for the past two years, yet the Government’s proposal for funding reforms assumes that London’s share has dropped by 40%. This could leave boroughs with a £1.5 billion cut, despite London being the region that uses emergency borrowing the most. Given that the fair funding review aims to match resource to need, will the Minister commit to correcting the children’s services formula or delaying its implementation until a proper review can be carried out?

[Baroness Taylor of Stevenage (Lab)]

The noble Lord raises an important issue around social care. He will know that the Government are committed to delivering reform to children’s social care and breaking the cycle of late intervention so that every child is safe and can thrive. We have already invested £500 million from the transformation fund to bring total funding over the spending review to more than £2 billion, and we are updating the formula to assess the need for children’s social care. The new children and young people’s services formula is based on the latest available data, has been developed in partnership with academics and is supported by the Institute for Fiscal Studies. I know that there are various factors driving the reductions in need share for some London boroughs. We will support local authorities by making sure that there are transitional protections in place if they see their funding fall as a result of the fair funding reform.