Wandsworth Council tax rise of 94 per cent for Band D households has set off a political and legal battle over how central government distributes funding to local authorities, with Conservative leaders warning the alternative to higher bills is bankruptcy.
The London borough announced that Band D residents will pay £958 more from next year, a consequence, the council says, of a government decision to cut its central funding by about £84m a year. Wandsworth has long been associated with low council tax, and local leaders say they had already identified £529 in savings per Band D household before reaching for tax rises to close what they describe as a total spending gap of about £1,434 per average household.
How the funding gap breaks down
According to the council, more than a third of that gap is accounted for by government funding cuts. The remainder comes from inflation and from plans inherited from the previous Labour administration. A Conservative source at the council said the authority faced a stark choice: ‘either balance the books through tax rises or face bankruptcy.’
Peter Graham, deputy leader of Wandsworth, said council members ‘do not want this’ and ‘do not take this decision lightly.’ He added: ‘Residents should not be left to carry the cost of an unfair funding system. That is why we are fighting hard at the heart of Government for a fairer deal for Wandsworth, and why we have made a clear case ahead of the Autumn Budget that our borough should not be punished for running efficient services and keeping council tax low.’
Funding to Wandsworth has been cut by about 40 per cent, with local leaders saying the loss is greater than the council’s entire budget for parks, libraries, leisure centres and street cleaning combined.
The scale of Wandsworth residents’ tax contribution to central government gives the borough’s case a sharper edge. According to Wandsworth Borough Council, residents paid £4.6bn in income tax in 2023/24, amounting to nearly £14,000 per head, three and a half times the national average. Borough leaders have used that figure to argue the government’s redistribution formula penalises high-contributing areas rather than rewarding them.
Wandsworth Council tax rise draws legal and legislative responses
The row has moved beyond local politics. Kemi Badenoch has said the Conservative Party has ‘instructed lawyers’ to explore whether the £84m-a-year funding cut can be blocked, according to BBC News.
At a council level, Wandsworth is pursuing a separate avenue. Together with Westminster City Council, Richmond Council and the Royal Borough of Kensington and Chelsea, it is currently consulting on using the Sustainable Communities Act to challenge the government proposals, Yahoo News Malaysia reported. The legislation offers local authorities a formal mechanism to make representations to the government, and the four councils are exploring whether it gives them grounds to resist the funding reductions.
Wandsworth was among a group of six councils given permission by the government to raise council tax above the usual 5 per cent cap for two years. The five London boroughs affected, Kensington and Chelsea, Westminster, Wandsworth, Hammersmith and Fulham, and the City of London, were joined by Windsor and Maidenhead in Berkshire. The government reduced their share of central funding and, in exchange, gave them greater room to raise revenue locally.
Westminster and Kensington and Chelsea, both run by Conservative administrations since the local elections, have separately joined Wandsworth in calling on the government to review its funding model and allow greater retention of tax receipts generated within each borough.
Communities secretary Angela Rayner has pressed ahead with updating the formulas that govern how central government grants are distributed across local authorities, shifting money away from parts of London towards regions in the North of England. Rayner has argued the old system was ‘unfair’ to deprived councils, while the affected London boroughs maintain they have been targeted rather than rewarded for fiscal discipline.
Labour MPs in the area have pushed back against the council’s position. Marsha De Cordova, Rosena Allin-Khan and Fleur Anderson said in a letter, reported by Politicshome, that they could not ‘support a narrative that seeks to rewrite the recent financial history of Wandsworth Council or shift responsibility for damaging choices that are being made by the current Conservative administration.’ The MPs argued the council had been ‘carefully managed’ under the previous Labour administration.
The legal challenge being explored by the Conservative Party and the Sustainable Communities Act consultation by the four boroughs are both at exploratory stages; neither has yet produced a formal challenge to the government’s funding settlement.
