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Inner-London Local Authorities: Funding — [Dr Andrew Murrison in the Chair]
10 February 2026
Lead MP
Helen Hayes
Dulwich and West Norwood
Lab
Responding Minister
Alison McGovern
Tags
EconomyTaxationHousing
Word Count: 9266
Other Contributors: 9
At a Glance
Helen Hayes raised concerns about inner-london local authorities: funding — [dr andrew murrison in the chair] in Westminster Hall. A government minister responded.
Key Requests to Government:
The hon. Member asks the government to increase the subsidy for temporary accommodation costs closer to actual housing expenses, raise the rate of local housing allowance, and consider removing the cap on recovery grants for Lambeth council to provide additional funding. She also requests the government to ensure that social housing sites are viable and deliver new homes at pace.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
The hon. Member is concerned about the significant cuts to local authority funding in inner London, which has led to a reduction of 60% in grant funding from central government over the past decade. She highlights rising service costs due to an ageing population and increased demand for social care, special education needs services, and temporary accommodation. The hon. Member also mentions that Southwark council spends £5 million per day on temporary accommodation for those who cannot afford stable housing.
Clapham and Brixton Hill
Addressed the issue of Lambeth missing out on £47.5 million over three years due to an arbitrary cap, despite the announced uplift in recovery grant.
David Simmonds
Con
Ruislip, Northwood and Pinner
He expressed concern over the funding formula for London's inner boroughs, noting a significant increase in rough sleeping and homelessness since the government took office. He highlighted that two-thirds of councils reported being worse off under the new settlement and cited acute pressures from housing need with collapses in new housing starts.
Dawn Butler
Lab
Brent East
Highlighted Brent council's daily expenditure of £100,000 on temporary housing and a waiting list of around 40,000 people. She emphasised the need to consider housing costs in inner London when calculating funding needs.
Florence Eshalomi
Lab Co-op
Vauxhall and Camberwell Green
Discussed rising housing costs in London, which have pushed more people into homelessness over 15 years. She questioned whether the Government should review the subsidy paid for temporary accommodation, noting it has been frozen since 2011. Raised concerns about local housing allowance rates and asked for collaboration with the DWP and Treasury to address these issues.
Jim Shannon
DUP
Strangford
Asked if there should be a focus on using brownfield sites for social housing to address the London housing crisis.
Joe Powell
Con
Kensington and Bayswater
Suggested that a 50:50 split of overnight stay levy could help address funding issues and support councils with capital projects such as public realm improvements. Mr Powell expressed concern about the royal borough of Kensington and Chelsea cutting £441,000 of council tax support to low-income families as its first decision. Asked about the distribution of funding and highlighted that London boroughs, despite facing challenges, should not be penalised.
Luke Taylor
Lib Dem
Sutton and Cheam
Noted that over the next three years, Lambeth residents will lose £75 per capita from central government support due to changes in funding contributions. He asked if this reduction was acceptable. Taylor criticised the current funding system for inner London boroughs, highlighting that per capita funding reductions over three years range from £37 in Lewisham to £247 in Westminster. He pointed out that two-thirds of the increase in total funding comes from assumed council tax increases and only two boroughs receive a real-terms funding increase per capita from the Government. Mr Taylor questioned whether the flexibility mentioned includes allowing inner-London boroughs to increase their council tax by up to 10% without a referendum. Asked the hon. Member for Dulwich and West Norwood to give way, expressing a desire to contribute.
Munira Wilson
Lib Dem
Twickenham
Ms Wilson apologised for her late arrival and discussed £29 million cuts over three years in Richmond, with a potential cliff edge of £46 million by year 4. She requested a meeting to discuss transitional protection.
Peter Fortune
Con
Bromley and Biggin Hill
Peter Fortune expressed concern over the unfair funding situation in Bromley, noting that the borough will face significant funding cuts of £6.5 million in 2026-27 rising to £22.2 million by 2028-29. He highlighted that if Bromley received average London core grant funding it would gain about £112 million extra. Fortune also criticised the mayor's precept increase and poor transport infrastructure in outer London. Mr Fortune highlighted a £22 million cut over the next three-year period for the London borough of Bromley, which will significantly impact residents despite the council pushing the council tax as high as possible.
Government Response
Alison McGovern
Government Response
Announced an additional £740 million in grant funding, including a £440 million uplift to the recovery grant. Mentioned that of this £2.6 billion investment over three years, £400 million is supporting London places affected by historical funding cuts and there is an additional £272 million for homelessness services, bringing the total investment to £3.5 billion. Stressed the need to realign council funding with deprivation needs and committed to ending wasteful competitive bidding while simplifying funding mechanisms. Noted that nine in ten councils will receive funding matching their assessed needs by 2028-29, up from one third before reforms. Addressed specific concerns raised about temporary accommodation, visitor levies, EFS usage, SEND deficits, and social care services.
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About Westminster Hall Debates
Westminster Hall debates are a chance for MPs to raise important issues affecting their constituents and get a response from a government minister. Unlike Prime Minister's Questions, these debates are more in-depth and collaborative. The MP who secured the debate speaks first, other MPs can contribute, and a minister responds with the government's position.