Deprived councils could lose millions in funding shake-up

Ministers face a backlash from Labour-run town halls after it emerged deprived inner-city London councils stand to lose millions of pounds under a proposed funding shake-up despite promises to redistribute cash away from wealthy areas.

- Patrick Butler

Central London councils with high levels of poverty and homelessness, including Camden, which includes Keir Starmer's parliamentary seat, could lose more than 10% of their funding under the proposals, according to the Institute for Fiscal Studies (IFS).

Several economically deprived northern areas, including South Tyneside, Sunderland, Gateshead and Wigan - each of which has high child poverty levels - were also expected to lose out under mooted changes to the English councils' funding formula.

The IFS said it was surprised the government's proposed funding formula changes were not more strongly geared towards deprivation and warned that some areas with traditionally high needs associated with poverty would lose millions of pounds.