Hammersmith and Fulham Council has decided against pursuing a legal challenge to the Government's Fair Funding reforms, following advice from a senior barrister that indicated a very low chance of success. Council Leader Stephen Cowan disclosed the decision during a London Councils fringe event at the Labour Party Conference, stating the authority had employed a “world-class KC (King’s Counsel)” who assessed the prospects of any potential action.
The move sets the Labour-led council apart from Conservative authorities in Westminster, Wandsworth, and Kensington and Chelsea, which have announced they will challenge the reforms under the Sustainable Communities Act. The City of London Corporation has also said it will consider an appeal.
KC advice and legal strategy
Cllr Cowan, who has led Hammersmith and Fulham since Labour took control in 2014, was asked whether the council was tempted to join the legal action. He explained the authority had sought professional guidance to evaluate the viability of a challenge. “I’m not interested in anything other than a win,” he said. “When you’re talking to a lawyer you say to them what are our chances…50 per cent chance of winning, is it a 40 per cent chance of winning, 70 per cent chance? We’ve been given a very low likelihood of winning any legal action, so we’re not going to pursue that route.”
The decision contrasts with the approach taken by other councils facing significant funding reductions. Wandsworth has warned it may need to increase council tax by 94 per cent from April 2027, having received special dispensation to exceed the 4.99 per cent threshold without a referendum. This would bring Wandsworth’s average council tax to a level similar to the London average, though the increase would place a significant burden on residents.
Funding cuts and council tax pressures
Westminster has stated that if the reforms proceed as planned, its grant funding will be cut from £219m to £119m over the next four years, requiring council tax to rise by 200 per cent. Hammersmith and Fulham, which has yet to announce its tax plans for the upcoming year, is also among the councils granted permission to go above the 4.99 per cent cap.
Asked whether Hammersmith and Fulham would introduce large council tax rises, Cllr Cowan said a hike is one of the options being considered, though the priority is reducing costs. The council is one of several Inner London authorities due to see their funding slashed under the reforms, which redirect grants to councils deemed to be in the greatest need.
Council response and budget outlook
In a council update published this week, Rowan Ree, Cabinet Member for Finance and Reform, said he has been working with councillors, officers, and MPs to push the Government to review the scheme. “However, the likelihood remains that the Government’s ‘Fair Funding’ changes will go ahead,” he wrote. “Therefore, I am looking at all options to meet the legal requirement to present a balanced council budget for next year and each of the subsequent years over the Government’s three-year funding settlement.”
Cllr Ree added that the funding cut could equate to 40 per cent of the local authority’s total budget of £222m, at a time when demand and costs for essential services continue to increase. “The scale of the Government funding reduction over the next four years means our efficiency savings alone will not be enough to close this budget gap. As a result, we must look at all our options,” he said.
He also emphasised the council’s commitment to maintaining services, stating: “I am determined H&F remains Britain's best value council. In H&F, people have services they simply wouldn't get if they lived elsewhere – from protecting residents during the cost-of-living crisis, to investing in young people and funding vital youth services and taking extra measures to cut crime and keep people safe.”
A Ministry of Housing, Communities and Local Government (MHCLG) spokesperson responded: “Local authorities decide the level of council tax they wish to set, but we are clear that in doing so they should put taxpayers first. We’ve made over £78 billion available for council finances next year, with the majority of money un-ringfenced so local leaders can decide how best to spend on their local priorities. And we’re fixing an outdated funding system so funding goes where need is greatest, while protecting councils through the transition and ensuring no area faces a cliff edge.”
Cllr Ree concluded that council taxpayers will soon be asked for their views, “to ensure your voice is heard as we work to protect the services you value the most”.
