Harrow Council is set to receive more than £100m from the Government’s Fair Funding Allocation next year but still faces a budget gap of nearly £10m. Despite the uptick, the local authority has warned that “it isn’t enough” to manage the rising costs associated with adult social care and temporary housing.
In November last year, the Government confirmed that funding allocations in England will be based on the 2025 indices of deprivation, population projections and service demands as it aims to reverse “years of unfair council funding”. The Fair Funding Allocation also includes multi-year settlements and non-ringfenced grants – which councils across London have long been calling for.
Following the review, Harrow Council is expected to get £100.6m in 2026, which will then rise to £108.3m and £116.3m in 2027 and 2028 respectively, according to the Government’s Fair Funding Allocation calculator. The amounts are set to be confirmed in February and could yet change.
The Harrow Labour Group has described the move as “a radical overhaul” of how local government is funded, which will give the council a “31 per cent increase in [its] spending power”. However, the council’s Portfolio Holder for Finance, Cllr David Ashton, has said that, whilst the increase “is welcome”, it is still not enough to eradicate the deficit.
Cllr Ashton added: “Although it is welcome that we are receiving some extra funding, it isn’t enough to deal with the pressures we are facing on adult social care – an additional pressure of £14.2million in 2026/27 – and temporary accommodation – an additional £12.1 million in 2026/27, which the Government has failed to address despite their promises.”
The Labour opposition claims Fair Funding will help “reverse a decade and a half of austerity and decline”, enabling councils to “have more resources available to bring back libraries, youth services, clean streets, and community hubs”.
But Cllr Ashton told the Local Democracy Reporting Service (LDRS) that the increased funding settlement will go “part of the way towards rises in costs but not all the way” and be swallowed up by the “bottomless pit” that is adult social care and temporary accommodation. This means that there won’t be anything left over to invest in many of the more community based services.
Prior to the announcement of its Fair Funding Allocation, Harrow Council’s finance team were operating under the presumption that it would be faced with a budget shortfall of around £32.5m – even with the assumed council tax increase of 4.99 per cent.
The new Government grant this year will mean an increase of around £22.9m in what was expected, according to Cllr Ashton. However, this still leaves the council with a deficit of around £9.6m. Harrow Labour’s Shadow Portfolio Holder for Finance, Cllr Natasha Proctor, puts this down to “14 years of chronic underfunding” of local authorities.
She told the LDRS: “While this funding does not entirely make up the budget gap initially forecast by Harrow Council, it goes a long way to bringing the shortfall to a manageable level.
“While the remaining shortfall is not ideal and the Government will be looking at ways to close this further in the future, this is a positive step after 14 years of chronic underfunding from successive Conservative governments – with Harrow Council being stripped of 97 per cent of government grant funding since 2011.”
