A comprehensive new study by the Institute for Fiscal Studies (IFS) has confirmed what Putney.news has been reporting for months – residents in Wandsworth face a perfect storm of government funding cuts and soaring council tax bills.
The 44-page report [pdf], published this week, provides the most detailed analysis yet of how the government’s Fair Funding Review 2.0 will impact local authority finances across England. For Putney residents, the findings reflect our earlier reporting that warned council tax bills could triple without intervention.
Based on the IFS analysis, Putney residents face substantial increases in their council tax bills over the next three years. Here’s what households can expect to pay by 2028-29:
| Property Band | Current Bill | Expected Bill 2028–29 | Increase |
|---|---|---|---|
| Band D | £900 | £1,400–£1,500 | £500–£600 |
| Band E | £1,100 | £1,700–£1,830 | £600–£730 |
| Band F | £1,300 | £2,000–£2,170 | £700–£870 |
| Band G | £1,500 | £2,300–£2,500 | £800–£1,000 |
| Band H | £1,800 | £2,800–£3,000 | £1,000–£1,200 |
Most realistic scenario: The IFS findings suggest Wandsworth will need to raise council tax by approximately 15-20% annually over three years to offset government funding cuts while maintaining basic services.
However, if Wandsworth receives minimal government protection (as the IFS suggests is possible), the “tripling” scenario remains on the table, potentially pushing Band D bills toward £2,400-2,700.
Wandsworth among biggest losers nationally
The IFS study identifies Wandsworth Borough Council as one of the worst-hit authorities in the entire country. If the government’s proposed funding reforms were introduced immediately, Wandsworth would lose over a quarter of its funding – one of the steepest cuts faced by any council in England.
Even with a three-year transition period and government “funding floors” designed to soften the blow, Wandsworth will still face real-terms cuts of 11-12% over the next three years. This places the borough among approximately 30 councils nationwide that will be placed on the lowest funding protection level.
The report specifically names Wandsworth alongside Camden, Hammersmith & Fulham, Kensington & Chelsea, and Westminster as councils that “would see funding fall by over a quarter if the reforms were introduced immediately.”
Why Wandsworth is being hit so hard
The IFS explains that inner London boroughs like Wandsworth are being penalised by two key factors in the government’s new funding formula:
Property Values: The new system assumes councils can raise more money locally because Wandsworth has many expensive properties that generate higher council tax revenues. However, Wandsworth has historically kept council tax rates low, meaning residents haven’t actually been paying these higher amounts.
Reduced Need Assessment: The government’s analysis suggests Wandsworth has lower spending needs compared to other areas, despite the borough’s own assessments showing significant pressures on services like social care and housing.
The IFS report provides independent academic confirmation of warnings that “without a special deal, council tax bills could triple” under the new funding arrangements.
What the numbers mean
The IFS estimates that if the reforms were fully implemented today, the government would redistribute £2.1 billion away from 186 councils (including Wandsworth) to 161 others deemed to have greater need.
For context, one-in-ten councils nationally would see funding cuts of 14% or more, while another one-in-ten would receive increases of 10% or more. Wandsworth’s position as facing cuts “over a quarter” places it in the most severely affected group.
Even with the government’s promised transition arrangements, the borough faces years of financial pressure that will inevitably impact either council tax levels, service provision, or both.
The study reveals a clear geographical pattern, with London as “the biggest loser” overall. Inner London boroughs face an average 1% cash-terms fall in funding, which translates to a 7% real-terms cut when inflation is factored in.
This contrasts sharply with areas like the East Midlands and Yorkshire & the Humber, which are set to see funding increases of 22% and 19% respectively over the next three years.
The government argues these changes are necessary to create a “fair” funding system that better reflects local needs and removes historical inequities. Ministers contend that wealthy areas like Wandsworth have benefited from outdated funding formulas and should contribute more to their own services.
However, the IFS notes that the reforms are “not particularly redistributive to poor, urban areas of England,” suggesting the changes may not achieve the government’s stated social justice objectives.
What happens next
The government is currently consulting on its proposals, with final decisions expected later this year. The new system would be phased in between 2026-27 and 2028-29, giving councils some time to adjust.
However, the IFS warns that even with transition arrangements, around one-in-four councils will see real-terms funding cuts over the next three years. For the 30 councils on the lowest funding floors – including Wandsworth – the situation is particularly acute.
For Putney residents, this analysis confirms that significant change is coming. The borough will need to find ways to maintain services with substantially less government support, inevitably leading to higher local taxes or service reductions.
The IFS study provides the most authoritative confirmation yet that the concerns raised are well-founded. As the think tank concludes, these reforms “cannot be a one-off” and will require ongoing adjustments to prevent similarly dramatic changes in future decades.
The question now is not whether Putney residents will face higher bills or reduced services, but how severe these changes will be and how quickly they will take effect.
