The City of London said it only received a one-year funding settlement from the Government
11:05, 15 Jan 2026
A Central London council has warned of a "wholesale review" of services after the Government slashed its funding. The City of London Corporation said the scale of the shortfall likely meant a "bottom up" assessment but stopped short of discussing measures in public.
It also said there was "a significant amount of uncertainty" around future funding settlements, according to a Finance Committee report. The report said the Government removed daily commuter population needs from its assessment of funding needs, which resulted in a needs assessment drop for the City of 76per cent, from £77million to £18m in 2026/27.
The report said the Corporation only received a one-year funding settlement while other local authorities received a three-year settlement. "There had been no prior notice that the Corporation would not be receiving a three-year funding settlement, so this change is very impactful on budget setting for 2026/27 and beyond," the report read.
According to the report, the City was "too much of an outlier" when it came to new funding arrangements and so ministers decided to allocate one year of funding on "value for money grounds". Ministers have agreed to a "bespoke" funding deal going forward.
Presenting the findings at a Finance Committee meeting on Tuesday (January 13), a senior City of London officer said: "Members, you need to be aware that the level of uncertainty around this could mean as much as a wholesale review of what we do as a local authority.
"This is not something where we can play around the edges with savings, this is categorically 'what services does this organisation provide as a local authority', potentially bottom up."
She said doubling council tax would only raise £5m. The City is one of six local authorities the Government has allowed to increase council tax above 5pc without a referendum.
This rule will remain in place for 2027/28 and 2028/29 and is to encourage low council tax areas to raise rates to the national Band D average of £2,100. The City, which has a Band D average of £1,101.34, said it would not increase council tax above 5pc in 2026/27.
The authority also said it provides services for all of London and the nation, such as the London Archives, the Heathrow Animal Reception Centre and the Port Health Authority, and would lobby the Government for more funding.
The City provides a range of services and funds its own police force. Services include funding for the Barbican Centre and the residential estate, community and children's services as well as planning and transport and many others. It has a budget of £324.8m.
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