Richmond upon Thames faces a potential loss of 91% of its grant funding, the largest proportion of any local authority nationally, due to the government's proposed changes in the Fair Funding Review 2.0. The updated formula will largely redirect funding from London Boroughs and Shire districts towards Shire Counties. Richmond is forecast to lose up to 91% of its grant funding over three years: 2025/26, 2026/27, and 2027/28, with the largest loss occurring in 2027/28, according to the Public reports pack.
The Finance, Policy and Resources Committee met on Thursday, 20 November 2025, to discuss the implications of these changes and the council's response.
The council anticipates the government will publish the provisional local government financial settlement in late December, with final figures confirmed in February 2026.
According to the Public reports pack, Richmond Council has engaged in a full and robust lobbying effort
to advocate for a fairer settlement.
The council's core demands include:
- Ensuring no council loses out in cash terms due to the funding changes.
- Extending the transition period for sustainable funding changes.
- Releasing government modelling for proper planning.
- Adjusting the formula to reflect high housing costs.
- Offering transitional protections for Richmond as an Outer London Borough.
- Exploring fiscal freedoms for local authorities to generate and retain more income.
Specifically, the council is seeking fiscal freedoms that would allow them to generate and retain more income, alongside other demands outlined in the Public reports pack.
Councillor Jim Millard, Deputy Leader and Finance and Resources Lead Member, introduced the Medium Term Financial Strategy report at the September 25th meeting, emphasising the Council's prudent financial management. He clarified that the projected funding loss of £45 million represents 90% of the Council's current government funding, the highest loss nationally.
The Chief Executive explained that the change programme was centred on core enabling factors to improve the Council's efficiency and effectiveness, including a major focus on motivating staff and fostering partnerships. However, the current financial challenge is of a much greater magnitude, requiring the Council to deliver savings at an unparalleled scale, with all areas of expenditure requiring thorough scrutiny. The report also notes ongoing pressures in homelessness and children's social care. To remain financially sustainable, the Council needs a transformation programme which will fundamentally reassess operations and service delivery. Efforts will be required to invest in preventative measures to manage future demand and to pursue growth that can expand the local tax base. Increased prosperity can also help reduce service demand.
