Richmond Council criticises government over unfair funding reforms

The Deputy Leader and Finance Lead for Richmond Council has expressed serious concerns over the government’s latest radical plans for redistributing resources across the country (known as Fair Funding Reforms), warning that the current approach risks penalising responsible councils and placing an unsustainable burden on local taxpayers.

"The government expects Richmond residents to pay increasingly high levels of Council Tax – rising by 5% each year – just to maintain essential services,” said Councillor Jim Millard.

"Costs of social care and dealing with homelessness are escalating quickly but the government has failed to provide adequate funding across the system. I am concerned that by reallocating a funding settlement that is already insufficient, Richmond residents are going to lose out even more”, added Councillor Millard.

The Council is particularly concerned that the funding formulae being proposed may not fairly reflect the borough’s needs. For example, the social care formula might not adequately reflect the cost of supporting Richmond’s most vulnerable adults and the new children’s services formula may not provide the right level of support either. The so-called 'Foundation Formula' which is meant to reflect the cost of providing services all residents expect, such as waste collection and maintaining our parks and open spaces, is also not well suited to an area like Richmond.

The Council also fears it will, in effect, be penalised for good financial stewardship.

Councilor Millard said:

"Since 2018 we’ve made almost £50m of efficiency savings through modernising services, streamlining processes, improved procurement and income generation. We’ve delivered significant capital investment without needing to borrow and have built up reserves responsibly, but now it feels as though we’re being punished for it. That sends the wrong message to councils who manage their finances prudently.

"The Council will be responding to the government’s latest funding consultation and, alongside local MPs Munira Wilson and Sarah Olney, will continue to lobby for a more equitable funding settlement that protects Richmond’s residents.

"While acknowledging the importance of a fair distribution, we will be urging the government to create a funding system that recognises the needs of all communities. This isn’t about opposing support for other areas of the country – it’s about ensuring there’s enough money in the system for everyone, and that the formulae used are genuinely fair," added Councillor Millard.