Government must reassert commitment to Fair Funding, says SIGOMA Chair

Posted on September 23, 2025

Writing in the Yorkshire Post, our Chair, Councillor Sir Stephen Houghton, explains why the government must reassert its commitment to the Fair Funding proposals in order to address inequality and deliver real improvement to people's everyday lives.

The recent reshuffle following Angela Rayner’s resignation has brought new MPs into key positions and perhaps ushered in a fresh set of departmental priorities. As the Prime Minister moves into Phase Two of his Government, there will be a clear shift in focus towards new policy areas.

But for councils... this transition must not mean that long-standing commitments are forgotten. Reforming council funding to deliver fairness and tackle regional inequality remains one of the most important long-term goals, and it must not be allowed to fall away...

Angela Rayner made council funding reform one of her top priorities as the Secretary of State for Housing, Communities and Local Government. Her commitment to equalising council funding – redistributing government grant funding from wealthier authorities in London and the South East, and towards more deprived areas in the Midlands and North ... These are places that have borne the brunt of austerity and have been left behind by a broken funding system, despite Labour councils doing their best with the bad hand they have been dealt.

But her departure - along with Minister Jim McMahon, who has done a tremendous job in pushing forward the agenda within government- has left our members worried that the reforms could be watered down and that councils ... will again be left in a perilous state of finances.

The reshuffle must not derail the progress we’ve made. Instead, it should be a moment to reaffirm the government’s commitment to fairness, funding equalisation, and empowering local authorities to deliver real change. Currently, the local government funding system reforms are going through a consultation period. While this is a valuable process to ensure the right funding formulas are in place, it is also the time of maximum risk. London councils and other authorities are already lobbying hard to protect their current allocations. With the Budget just months away, there will be calls to cut council funding and reduce public spending to balance the books...

We must show what happens when the government supports local councils: safer streets, stronger local economies, and better public services. These are the tangible changes people want to see.

There are encouraging signs from the new leadership team. Steve Reed, now Secretary of State for Housing, Communities and Local Government, has previously acknowledged that the rise of Reform UK is a symptom of broken trust between government and communities and has committed to restoring that trust through meaningful reform. Minister Alison McGovern understands the challenges facing local authorities, particularly in deprived areas, and has backed plans to consolidate fragmented funding pots into more flexible, needs-based allocation...

We are at a crossroads. Reforming local government finance is not just good policy, it’s essential politics. If we fail to act now, we risk deepening the divide between regions, losing the trust of voters, and missing a once-in-a-generation opportunity to rebuild our communities.

I urge the government not to lose sight of this. Council funding reform is not a side issue. It is central to the future of our country. 

You can read the full article in the Yorkshire Post here.