Inner-London Local Authorities: Funding

Peter Fortune Excerpts

Tuesday 10th February 2026 Westminster Hall

[Peter Fortune (Bromley and Biggin Hill) (Con)]

It is a pleasure to serve under your chairmanship, Dr Murrison. I congratulate the hon. Member for Dulwich and West Norwood (Helen Hayes) on securing this important debate.

Let me start by expressing my agreement with colleagues from outer London. Local authorities are in a perilous position, and have been for some time, due to Governments of all stripes. As a former council deputy leader and cabinet member for children’s services, I really do understand. I also believe that Members from inner London will benefit from an enhanced appreciation of the specific struggles those of us in outer London face.

I want especially to raise the devastating impact of unfair funding on my borough of Bromley. Bromley has the third lowest settlement funding per head among London boroughs. As a result of the Government’s provisional settlement, Bromley will see funding reductions of £6.5 million in 2026-27, rising to £22.2 million per annum by 2028-29. That equates to over £30 million per year in real-terms funding reductions by 2028-29. If the Government’s funding were fair, Bromley would instead be receiving a funding increase. Indeed, if Bromley received the average London core grant funding in 2026-27, it would gain about £112 million extra—an enormous figure.

Any cuts to our funding are felt more keenly than by other councils, too. Bromley maintains the lowest net expenditure per head in London while delivering efficient services for its residents, limiting our ability to realise significant savings compared with other, high-cost authorities. Effectively, the Government are punishing Bromley for being an efficient, well-run council, while Government after Government bail out failing councils. Bromley deserves better.

Bromley is no stranger to being targeted. The mayor’s precept currently stands at just over £490 for a band D property—a more than 77% increase since Sadiq Khan became Mayor of London. Before anybody highlights inflation, a rise in line with inflation would have brought the precept to just over £380, an increase of 39% rather than the 77% that has been inflicted on us.

What do people in the inner-London boroughs get? A regular and extensive bus service and a tube network to their doorstep. What do the people of Bromley get? Poor transport infrastructure and a mayor who keeps coming back to siphon more and more money from our borough, close our 24-hour police desk and fleece motorists with increased congestion charges and an expanded ultra low emission zone charge. Outer London is subsidising inner London’s transport network, while Bromley is served by only two direct bus routes into central London, both of which only run after midnight.

If we are going to have to continue to pay into the mayor’s coffers, will he or she at least ensure that the Superloop is extended a mere 2 miles to run from Bromley North via Plaistow Green, and can we please keep our 24-hour police desk? The situation in which Bromley and the rest of outer London is simply ignored by the Government and this mayor cannot continue. We deserve fairer funding. Bromley council wants to work with the Government, but the Government need to listen so that we see a truly fair and sustainable settlement that does not punish boroughs like Bromley.

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[Alison McGovern]

I will make some progress. Yesterday’s announcement keeps our promise of a multi-year settlement, because local communities in London and elsewhere deserved better than the out-of-date funding allocations not aligned with need, which meant poorer public services and slower growth, particularly for those dealing with the consequences of poverty.

We are making changes to how councils are funded. Many of these are changes that the public, local government partners and Parliament have long called for. We consulted four times on these changes, and we are grateful for the engagement from all corners, including from hon. Members in this debate. The engagement has informed our approach at every stage. The settlement confirms multi-year funding, our pledge to realign funding with need, and our commitment to end wasteful competitive bidding and to simplify funding.

The Government have an important role as an equaliser for local government income, and we are directing funding towards the places that are less able to meet their needs through locally raised income, which will enable all local authorities to provide similar levels of services to their residents. However, that is true notwithstanding the major differences in spiking demands around the country.

Following the provisional settlement consultation, the Government have announced an additional £740 million in grant funding as part of the final settlement, including a £440 million uplift to the recovery grant, bringing total investment over the multi-year settlement to £2.6 billion. Of that £2.6 billion, £400 million is supporting places in London that suffered the most from historical funding cuts, and there is an additional £272 million to bring the total investment in homelessness and rough sleeping services over the next three years to £3.5 billion—including over £800 million in London as part of our national plan to end homelessness.

That is a significant investment in the capital’s homelessness services, which is much needed, as has been mentioned by Members from across the House. It takes the total new grant funding delivered through the annual settlements for 2026-27 to 2028-29 to over £4 billion. Since coming to power, we have pledged a 24.2% increase in core spending power by 2028-29 when compared with 2024-25, worth over £16.6 billion. It is a significant uplift in the spending power of councils.

According to analysis by the Department, as a result of our reforms, nine in 10 councils will receive funding that broadly matches their assessed need by the end of the multi-year settlement, up from around one third before our reforms. In 2028-29, the most deprived places will receive 45% more funding per head than the least deprived.

[Peter Fortune]

Will the Minister give way?

[Alison McGovern]

I will give way to my hon. Friend the Member for Kensington and Bayswater (Joe Powell) first.

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[Alison McGovern]

I agree, and my hon. Friend makes that case very well. I imagine that his local authority could have made other choices than that one.

[Peter Fortune]

I thank the Minister for the objective way that she is tackling this debate, but the reality for the London borough of Bromley is a £22 million cut over the next three-year period. Thinking about the deprivation and the challenges that we have, including the second-highest number of education, health and care plans in London, the cut will have a significant impact on our residents, despite pushing council tax as high as we can.

[Alison McGovern]

I take the hon. Gentleman’s point. Our challenge is to understand how we can best use our resources to support all our children. We could try to increase funding again and again, without any changes to the system, but we would not necessarily get better outcomes, and costs would keep going up, not least because councils have issues with how they are able to provide some of the support that children need. We need to get to a more stable financial position and take responsibility in this place to change the policy failures that caused the cost spikes that the hon. Gentleman mentioned.

Compared with 2024-25, by 2028-29 London will see an increase in core spending power of more than £3 billion. The vast majority of councils in London will see a real-terms increase between 2024-25 and 2028-29 and a fairer system that addresses issues that matter in London—and across England—including recognising the additional strain that commuters and tourists can place on service provision, taking into account need in specific high-demand service areas such as temporary accommodation and crucially, using the most up-to-date data, including the 2025 indices of multiple deprivation. That has been the subject of some feedback to the Department. It is a statement of the obvious that we would use the most up-to-date data, and it so happens that that data can better account for the impact of housing costs on poverty. That was always the intention, and we would always have done that, whatever noise I have picked up on this topic.