Royal Borough MPs send joint letter to Government over Fair Funding Review 2.0 concerns

The Royal Borough’s MPs have sent a joint letter to the Government raising concerns about changes to the ways councils are funded.

Last year, the Labour Government launched its Fair Funding Review 2.0, which aims to reform council funding to direct more money towards local authorities in deprived areas across the country.

The approach considers the different costs and needs of a local authority and the ability for individual councils to raise council tax.

At a cabinet meeting in November, the Royal Borough’s finance lead, Cllr Lynne Jones, called the reforms a ‘kick in the teeth’, with the Royal Borough receiving £35million less annually from central Government.

The letter from Maidenhead Lib Dem MP Josh Reynolds and Windsor’s Conservative MP Jack Rankin to chancellor Rachel Reeves MP, said: “As a council with low council tax and relatively low deprivation, the Royal Borough is adversely affected by Fair Funding 2.0 to a significant degree.

“There is concern that the only solution offered to address this will be to increase dependence on exceptional financial support, which is an unsustainable solution for local and national government – that cannot be your intent.

“We therefore request that an adjustment to the spending power calculation is applied in respect of the Royal Borough.”

The Government’s calculations have assumed a £2,000 notional tax base per Band D property, but council tax in the Royal Borough is £500 lower than assumed, the letter added.

It explained that despite the Royal Borough receiving approval to raise council tax by 8.99 per cent for 2025/26 (above the 4.99 per cent cap), the cash increase on Band D properties ‘was equivalent’ to that of some of the neighbouring authorities who applied the 4.99 per cent maximum within the threshold.

The formula results in a ‘significant’ 22.9 per cent decrease in funding for children’s services, the MPs said.

The letter added the use of ‘historic’ pre-COVID modelling ‘doesn’t consider’ the increases in ‘demand, complexity and cost’ that have been seen by the Royal Borough and other authorities.

The pair have called for a ‘robust and sustainable’ funding formula that considers more indicators such as risks outside the home and special educational needs and disabilities (SEND), instead of having ‘just a focus on deprivation’.

The MPs also said they ‘do not think it is acceptable that none’ of the mansion tax revenue raised is retained locally.

In a joint statement, Cllr Lynne Jones and council leader Cllr Simon Werner, said: “It’s already clear that RBWM is in a select group of councils that are worst hit by the changes. The government’s funding model assumes all councils already levy a national average level of council tax.

“In reality, RBWM’s council tax is extremely low, yet we face the same increasing demand pressures as other councils, particularly in social care.

“This creates a clear imbalance in how the proposals impact our borough. It’s right and welcome that our local MPs raise these concerns on the disproportionate impact on our borough with the highest levels of government.

“We have written to the government to set out the scale of the impact, and we will continue to make the strongest possible case for a funding settlement that reflects the reality on the ground in our borough.”

A Government spokesperson said: “We’ve made almost £78billion available to England’s councils this year and radically overhauled the broken funding system we inherited, so the most deprived communities benefit.

“By the end of the multi-year period, we will have provided a 15.1 per cent cash-terms increase for local authorities in England to help them deliver high quality public services.”