Richmond Council has welcomed a key change in government policy that appears set to spare the borough from the severe funding cuts previously feared under national reforms to council finance.

Earlier indicative modelling suggested Richmond could have faced reductions of up to £45 million a year, equivalent to more than 90% of its current core funding.

However, the government's latest Policy Statement signals that Richmond is likely to fall into the group of authorities receiving a cash-flat settlement for the next three years, meaning its baseline funding would not be cut during the transition to the new system.

The Council has been pressing ministers and officials for months to ensure any new national formula reflects the realities facing outer London, including demographic pressures, rising social care needs and the increased costs of delivering statutory services.

Council Leader Cllr Gareth Roberts said the shift showed that local concerns had been acknowledged: "This announcement shows our concerns have been heard. We have been absolutely clear with government: Richmond needs a fair settlement that protects essential services for the people who rely on them.

"I'm pleased that Ministers have listened and that the most severe cuts originally proposed will now not be applied – it's a significant improvement from what was originally on the table."

Councils across London continue to face rapidly increasing costs, particularly in adult social care, children's services and externally commissioned provision affected by high inflation. Outer London authorities have long argued that these pressures must be recognised within any reformed national funding formula.

Under the updated government position, confirmed measures include:

• a three-year transition period beginning April 2026
• a 0% cash floor for boroughs previously facing reductions
• ongoing discussions with councils on possible limited council tax flexibility

Cllr Jim Millard, Deputy Leader and Finance Lead, said that while the announcement was a step forward, pressures remain: "This announcement is a significant improvement on the original proposals and shows the strength of our case to government.

"But it's important to be clear: national funding for councils is still falling, and local taxation is playing an ever-larger role in filling the gap.

Our focus now is delivering our ambitious transformation programme to protect services and shield residents from steep increases that would otherwise be needed."

The Council is now waiting for detailed government modelling and will continue working with London Councils and MHCLG officials as further information emerges.

READ MORE: Richmond Council takes legal action against 'potentially devastating government cuts'

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