Question to the Ministry of Housing, Communities and Local Government:

To ask His Majesty's Government whether costs associated with London's role as a capital city will be reflected in the Fair Funding 2.0 formula.

I refer the noble Lord to the statement made by my hon friend the Minister for Local Government [Local government finance policy statement 2026-27 to 2028-29 - GOV.UK] (attached) which was published on Thursday 20 November, which sets out our plans for the 2026-27 to 2028-29 multi-year Local Government Finance Settlement. These proposals represent a fairer system for all authorities which recognises the variation in demand and the cost of providing services in different places.

We have always said we are committed to supporting public services and driving growth across the country, including London, as part of our Plan for Change. This includes recognising the additional strain that commuters and tourists can place on service provision in some authorities – including those in London - and taking account of need in specific service areas like temporary accommodation.

We have also used the latest data from the 2025 Indices of Deprivation in both the Foundation Formula and the Children’s and Young People’s Services formula. These include incorporating data on Universal Credit claimants, enabling the measure to account for income after housing costs. Incorporating this data in our updated assessment of need is consistent with the Fair Funding Review 2.0’s principle of using the most recent and most robust evidence available.