The UK government is facing a significant legal challenge in the High Court over allegations it used an 'irrational and unfair' formula to make deep cuts to local council funding. The case, brought by the lobbying group SIGOMA (Special Interest Group of Municipal Authorities), represents 47 urban councils across England and claims the methodology for the recent 'Levelling Up' funding allocation is fundamentally flawed.
The legal claim argues that the government's new approach to calculating the 'Funding Assurance Assessment' unfairly penalises poorer areas in the North, Midlands, and South, while disproportionately benefiting more affluent councils in the South East. This technical change, SIGOMA alleges, has redirected vital resources away from the communities that need them most.
Austerity by Stealth?
At the heart of the dispute is a shift in how the government assesses a council's 'core spending power'. The claimants contend that the new formula uses outdated and unrepresentative data from 2019-20, a period which does not account for the severe financial pressures and increased demand for services that councils have faced since the pandemic.
This legal action highlights the growing desperation of local authorities struggling to balance their books. Councils are legally obliged to set a balanced budget, and many have already been forced to make severe cuts to essential services, including social care, libraries, and waste collection, to avoid effective bankruptcy.
The Government's Defence
The Department for Levelling Up, Housing and Communities (DLUHC), led by Secretary of State Michael Gove, has stated it does not comment on ongoing legal proceedings. However, it has previously defended its funding settlements, emphasising that the latest financial package provides councils in England with a £64.7 billion boost – an above-inflation increase of 7.5%.
The outcome of this judicial review could have far-reaching implications. If the High Court rules in SIGOMA's favour, it could force the government to revisit its entire funding allocation model for local authorities, potentially unlocking millions of pounds for struggling urban councils and setting a new precedent for how public funds are distributed across the country.
