Andy Burnham’s government is taking money from well-run councils in Conservative and Liberal Democrat areas and handing it to Labour-controlled town halls, new figures show.
Prudent councils lose almost £500m while Labour strongholds, including bankrupt Birmingham, pocket £1.6bn.
A Telegraph analysis of House of Commons data found that councils where Conservatives or Lib Dems are the largest party will lose £487m in government-controlled funding over this parliament. Labour-dominated councils will gain £1.6bn.
Tory-led councils face a 6.5 per cent cut by 2028-29. Lib Dem councils lose 5.2 per cent. Labour councils, meanwhile, enjoy a 14.6 per cent increase, from £10.8bn to £12.3bn.
The pattern is hard to miss. About three-quarters of Conservative and Lib Dem councils face cash cuts. Only one in three Labour councils does.
Bankrupt Birmingham tops the table
The biggest winner in the country is Labour-run Birmingham. The city declared itself effectively bankrupt in 2023 after years of financial failure. Under Labour’s new formula, it receives an extra £404m, more than any other council in England.
Councils that balanced their books, by contrast, are being told to make do with less. Tonbridge and Malling has shelved plans for 300 social homes. Its leader, Matt Boughton, said the council was being punished for managing its finances well.
Thatcher’s favourite council forced to double tax
Nowhere shows the damage more clearly than Wandsworth. For decades the borough offered residents some of the lowest council tax in Britain. Now it plans to raise Band D bills by £958, a 94 per cent rise, from April 2027.
The council says Whitehall funding has been cut by around 40 per cent. That loss is bigger than its entire budget for parks, libraries, leisure centres and street cleaning.
Rather than stand up for their constituents, Wandsworth’s Labour MPs, including Marsha De Cordova, Rosena Allin-Khan and Fleur Anderson, refused to back the council’s bid for fairer funding.
Kemi Badenoch has instructed Conservative Party lawyers to explore a challenge. She noted that Mr Burnham had not found 40 per cent of anything to cut in his own government, yet expected Wandsworth to do exactly that.
“Growth in every postcode”, unless it votes Tory
Mr Burnham came to Downing Street promising “good growth in every postcode”. Council leaders in the shires say they have seen little sign of it.
Steve Broadbent, the leader of Buckinghamshire Council, said the Prime Minister’s growth pledge apparently did not extend to places outside Labour’s control.
Elsewhere the cuts are severe. Lib Dem-led Windsor and Maidenhead loses 86 per cent of its government-controlled funding. Conservative-led Surrey loses 63 per cent. Kensington and Chelsea is £61.3m worse off, and its leader Elizabeth Campbell said the council was “looking down the barrel of a gun”.
Rayner back in charge
The policy is overseen by Angela Rayner, who returned as Communities Secretary in Mr Burnham’s first cabinet in July. She had resigned from the same post in September 2025 after underpaying stamp duty on an £800,000 flat. HMRC later cleared her of wrongdoing.
Ministers insist the new formula simply targets need and deprivation. The Ministry of Housing, Communities and Local Government says nine in ten councils will now be funded broadly in line with need.
For residents of Wandsworth, Surrey and Windsor, the result looks the same whatever the label: higher bills, fewer services and a government that rewards failure.
