Haringey Council is warning of devastating cuts to local services after government analysis revealed the North London borough could lose more than £40 million in grants over three years under proposed funding reforms.

The council, which already receives 15% less per resident than the England average, says it is operating with £143 million less in real terms than in 2010 despite rising costs and increased demand for services.

Under the government’s Fair Funding 2.0 proposals, Haringey estimates it could lose 20% of its government grants if the reforms proceed in their current form. The council submitted its concerns to the government following a Cabinet meeting on Monday night.

“Devastating Impact” Warning

Council Leader Peray Ahmet welcomed the government’s commitment to addressing long-standing funding issues but warned the proposals would have a “devastating” impact on one of London’s most deprived boroughs.

“After more than a decade of underfunding combined with spiralling demand and costs for services, the impact on our borough would be devastating,” Ahmet said. “Haringey is one of the most deprived boroughs in London where almost 20% of children are living in poverty.”

The borough has historically been funded at lower levels than neighboring areas despite sharing similar inner London characteristics, according to the council.

Key Concerns Raised

Haringey has identified several critical issues with the government’s proposals, including insufficient overall funding for councils to meet their statutory duties and inadequate provision for temporary accommodation amid high demand in London.

The council also argues that the government’s method of assessing need and income deprivation fails to account for housing costs’ impact on household disposable income – a significant factor in London.

With 80% of Haringey’s service budget already committed to adult services, children’s services, and temporary accommodation, further cuts would inevitably affect discretionary services, the council warns.

London-Wide Impact

The concerns extend beyond Haringey, with London Councils estimating that the capital’s boroughs will collectively receive £700 million less under the proposed reforms compared to current arrangements.

The proposed children’s services formula alone would remove more than £1.5 billion from London’s children’s services, affecting a city where nearly half of all children live in poverty when housing costs are considered.

Haringey is calling for a more accurate deprivation assessment that matches resources to genuine local needs and recognition that many councils are already struggling with funding shortfalls, with some requiring Exceptional Financial Support that has added to their debt burden.

The government consultation on Fair Funding 2.0 aims to reform how central government funding is distributed to local authorities across England.