CHILDREN’S services face a “devastating impact” under government plans to change local authority funding, a body representing councils in London warned today.

The Ministry for Housing, Communities and Local Government is consulting on plans to alter the way the distribution of core council funding is set from 2026/27.

The proposals risk “dramatically underestimating levels of need” across the country, said London Boroughs.

Claire Holland, London Councils chair and Labour leader of Lambeth Council, said that while reforming council funding is long overdue, “it is critical that funding is distributed fairly and efficiently on the basis of need.

“However, it’s clear there are serious issues with the proposed children’s services formula, which risks dramatically underestimating levels of need in London and other parts of the country.”

A study by the National Children’s Bureau has warned the new “unique” formula for children’s services “has questionable overall robustness and accuracy.”

It lacks testing, metrics “are not correlated with need” and by excluding housing costs, which are particularly high in London, funding allocations will be skewed, it said.

The proposed measure of child health is also subjective and a more accurate measure, such as figures on special educational needs and disability, would capture a broader range of need, it said.

National Children’s Bureau’s social care programme lead James Shutkever said: “We urge the government to consider the recommendations set out in the report and refine its proposals.

“This will help to ensure that the formula lives up to its name and is based on need.”

The ministry insisted that the changes “account for specific demand on services in London and will deliver fairer funding for all councils.”