Kemi Badenoch has instructed lawyers to examine a legal challenge against the Labour Government after its local government funding reforms left Conservative-run Wandsworth facing a staggering 94 per cent council tax increase.
The Conservative leader accused Prime Minister Andy Burnham’s Government of treating residents unfairly after changes to the funding system left the London borough facing an £84 million-a-year reduction in government support by the end of the settlement period.
Wandsworth Council says that amounts to a 40 per cent reduction in its government funding and has warned that, unless ministers reconsider the settlement, its Band D council tax will need to rise by £958.
The final council tax figure has not yet been set, with Wandsworth saying its formal budget will be agreed in March 2027.
But with households potentially facing a near-doubling of the borough’s element of their bill, Badenoch has now revealed that the Conservatives have instructed lawyers to investigate whether the Government’s decision can be challenged.
Speaking on BBC Newsnight, she described the situation as “outrageous” and accused Labour of shifting resources away from areas which do not support the party electorally.
She said: “So we have actually instructed lawyers, as the Conservative Party, to see if we can challenge the government on this decision.”
Badenoch claimed the funding changes looked like Labour was “taking money from areas that don’t vote Labour and giving it to places that do vote Labour”.
The Government disputes the broader criticism of its funding reforms. Its stated rationale is that the previous system produced large disparities between councils and that resources should be redirected towards areas with greater need.
Ministers have specifically pointed to exceptionally low council tax bills in six authorities, including Wandsworth, arguing taxpayers elsewhere should not effectively subsidise those lower bills. Government documents say Band D taxpayers in the six areas were paying between £450 and £1,280 less than the English average when the reforms were drawn up.
However, that argument will offer little comfort to Wandsworth households now contemplating an extraordinary increase in their own bills.
The Government has decided not to impose the usual council tax referendum principles on Wandsworth and five other authorities in 2027/28 and 2028/29, giving them greater freedom to increase bills without putting rises above the normal threshold to local voters.
Badenoch also turned the row into a wider attack on Burnham’s spending priorities, questioning why households should be expected to absorb such a dramatic adjustment while the Prime Minister resists substantial reductions elsewhere in government expenditure.
She said: “Andy Burnham has not found 40 per cent of anything to cut, but he’s asking Wandsworth to do that. I don’t think that’s fair. I don’t think that’s right.”
And she took direct aim at the welfare budget, asking: “If he thinks it’s so easy to find 40 per cent of cuts why hasn’t he done that with the welfare bill?”
The row is particularly politically charged because of Wandsworth’s history.
The borough was controlled by the Conservatives for more than four decades between 1978 and 2022 and became famous nationally for its low-tax approach to local government.
Labour captured the council in 2022, but this year’s local elections resulted in no overall control, with the Conservatives subsequently emerging as the largest party.
Wandsworth says it has already carried out a comprehensive spending review, identifying savings, service changes and reductions in planned borrowing, while attempting to protect services including libraries, street cleaning and social care.
The council argues that even those measures cannot compensate for the scale of the funding reduction.
Its figures show government support will be £84 million a year lower by the end of the settlement period, a sum it says exceeds its combined expenditure on parks, libraries, leisure centres, bin collections and street cleaning.
The Government argues its reforms are about fairness, directing more resources towards councils facing higher levels of need rather than continuing arrangements which helped maintain exceptionally low council tax bills in a small number of areas.
For Burnham, however, the political optics are brutal.
A Labour Government promising fairness has introduced a funding settlement under which residents of one borough could see the council’s portion of their tax bill almost double, while simultaneously removing the normal referendum constraint that would otherwise give those residents a direct say.
Now Badenoch wants the courts to examine whether Labour has gone too far.
