Badenoch seeks legal challenge over Wandsworth funding cuts

What happened

Kemi Badenoch has instructed Conservative Party lawyers to examine whether government funding changes can be challenged after Wandsworth Council proposed increasing council tax bills by 94%.

The Conservative-run authority in south-west London announced the proposal at a council meeting on Tuesday. For a Band D home, the annual bill would increase by £958, taking the total from £1,020 to £1,978.

The council links the increase to changes in how central government distributes money between local authorities. It says those changes will leave it receiving £84 million less each year by the end of a three-year period.

Speaking on BBC Newsnight, Badenoch blamed a 40% reduction in government funding for the proposed rise. She said lawyers were assessing whether the party could contest the government's decision, taking the dispute beyond the borough's own campaign against the cuts.

Ministers defend the redistribution as a way to direct resources towards greater need. They also maintain that councils themselves are responsible for deciding how much council tax to charge.

The background

Wandsworth has historically charged some of the lowest council tax rates in the country. Its current Band D bill is only just above £1,000, while bills exceeding £2,000 have become more common across other London boroughs.

Labour took control of the council in 2022, but lost it to the Conservatives at the elections in May after one term in office. The incoming administration subsequently commissioned a spending review, published during the summer.

That review presented a sharply critical account of the finances inherited from Labour. It described an exceptional combination of reductions in government support, forecast overspending and a projected budget shortfall.

The review said the previous administration had drawn on reserves to make its budgets balance. Reserves are money held by a council that can support spending, but using them does not create a continuing source of annual income.

It also said staffing had increased by 14% since Labour took office in 2022, and accused the former administration of increasing spending and borrowing without securing additional revenue to match.

The review warned that, unless urgent measures were taken, balancing the finances could require a council tax increase above 230%. That was a warning about the financial outlook, rather than the increase now being proposed.

Badenoch has separately accused the government of leaving Wandsworth facing a £137 million financial gap. She has blamed funding reforms overseen by Housing Secretary Angela Rayner, arguing that the redistribution favours Labour-supporting areas in northern England.

The changes to the council funding formula were announced last year. Their effect is to shift government support between areas, creating a dispute both about Wandsworth's own finances and about the principles used to allocate national funding.

How the bill would change

Wandsworth residents' council tax bills contain two principal charges: the borough council's share and the amount set for the Mayor of London. At present, each accounts for £510 of the £1,020 annual Band D total.

Under the proposal, the mayoral charge would remain unchanged. The full £958 increase would be added to the borough's share, bringing that element to £1,468 and producing a combined bill of £1,978.

The 94% figure therefore describes the increase in the overall household bill, not the percentage change in the borough council's component alone. Because that component starts at £510, its proposed increase is substantially larger in percentage terms.

Spread across a full year, the extra £958 amounts to just under £80 a month. That is an illustration of the annual budget impact, rather than a statement about any individual household's instalment arrangements.

Band D provides the comparison used in the proposal. Council tax operates through property bands, so the headline cash figures are not a single flat charge applying to every home in the borough.

What people are saying

Badenoch said the scale of the increase would put pressure on family finances. Challenged over Wandsworth's bills remaining below those in many other council areas, she argued that a relatively low starting point did not mean residents could readily absorb a sudden rise.

She alleged that political considerations were influencing the redistribution, with money moving away from places that do not support Labour towards those that do. This is the Conservative leader's accusation; the government's stated justification is to allocate funding according to need.

Badenoch did not put forward an alternative percentage increase when questioned. Instead, she contrasted the reduction facing Wandsworth with Andy Burnham, arguing that he had not had to identify cuts on a comparable scale.

She also defended her own time as a local government minister under the Conservatives. That exchange brought the previous government's record into the dispute, including reductions in some council grants during Conservative administrations.

Wandsworth's Conservative deputy leader acknowledged on Tuesday that households would find higher bills difficult. The council leadership said it regarded the position as unfair and intended to keep pursuing ways to oppose the government's funding decision.

Labour's opposition leader on the council, Simon Hogg, rejected the proposed increase. He blamed the Conservative administration's handling of the authority and argued that residents were being asked to meet an unnecessary and unjustified cost.

The borough's three Labour MPs — Rosena Allin-Khan, Fleur Anderson and Marsha de Cordova — have declined to support the council's appeal to ministers to halt the funding cuts. They say the authority's finances were sound before the Conservatives returned to power in May.

The Ministry of Housing, Communities and Local Government has urged councils to prioritise taxpayers when setting bills. It says the funding system needs updating and that transitional protections will prevent authorities from experiencing an abrupt loss of support.

What happens next

A final decision on Wandsworth's council tax proposal is due early next year. The increase announced on Tuesday is therefore a proposal awaiting that decision, rather than a completed change to residents' bills.

The usual 5% annual limit on council tax increases has been lifted for Wandsworth in response to the funding reductions. The same flexibility applies to Westminster, Richmond, Kensington and Chelsea, and Windsor and Maidenhead in Berkshire.

Alongside the Conservative Party's legal assessment, Wandsworth is pursuing a challenge through the Sustainable Communities Act. Other London authorities, including Westminster, Richmond and Kensington and Chelsea, are considering joining that effort against the funding changes.

These are distinct strands of the dispute: the party has asked lawyers to assess a potential challenge, while councils are exploring a statutory route to press their case. The immediate local decision remains how Wandsworth sets its budget and the charge residents will pay.

Why this matters

For Wandsworth households, the practical issue is the speed and size of the proposed change, not simply the borough's position in national comparisons. Residents accustomed to comparatively low bills face having to find almost twice as much for the same annual tax obligation.

Elsewhere in the UK, the dispute illustrates the distinction between government support and locally raised tax. Redistribution can give some councils more funding while reducing support for others; where limits on tax increases are relaxed, local budget decisions can have a particularly large effect on household costs.