East Riding Councillors Condemn ‘Punitive’ Government Funding Review as Council Faces £100 Million Shortfall

Councillors in the East Riding have expressed a mixture of shock and outrage following the government's "fairer funding review," a provisional settlement that local leaders claim will leave the authority as one of the most financially vulnerable in the country.

The council is reportedly facing a structural reduction of £32.2 million from its annual settlement funding, a change scheduled to be phased in over three years starting from the 2026/27 financial year. Over a four-year period, the authority is predicted to lose close to £100 million.

Andy Parkinson, the Council's Director of Digital, Change and Technology, highlighted the severity of the situation for the organisation's future operations. He stated:

"The government's fair funding review, as it's titled, will leave this council critically financially exposed.

We find ourselves as one of the worst hit unitary authorities in the country. And as it stands, we're predicted to lose upwards of close to 100 million over our 4-year plan. And that is incredibly difficult to respond to.

So, with depleted reserves and a need to respond to that quickly, this is why this report is so critical now that we take action in developing our new strategic operating model."

Councillor Denis Healy argued that the changes represent far more than a mere technical adjustment and will impact the lives of local residents.

Councillor Healy said:

"We're being asked to respond to what is being presented as a funding reform. That's what they call it, a reform. But what in reality is a 32 million cut to the East Riding's future.

And let's be clear about what that means. This is not an abstract accounting exercise. It's not just a technical change to a formula. It's a decision that will affect real people, real families, and real communities right across this authority.

And the government's proposals have at a stroke made the East Riding one of the biggest losers among unitary councils in England. And we're losing because the system fails to recognize who we are, what we are.

We're rural. We're coastal. We have an ageing population. And those facts bring higher costs, not lower ones."

He further elaborated on the specific pressures of providing services in a vast rural area, noting that the government's formula fails to recognise the high costs associated with local geography:

"Delivering adult social care across a wide rural area costs more. Running transport services where alternatives are limited costs more. Supporting children with additional needs costs more. Yet under these proposals, none of this is properly recognized. Instead, the East Riding is being penalized for being exactly what it is. That simply cannot be right."

Echoing these sentiments, Councillor Philip Redshaw, who proposed a motion to formally condemn the proposals, described the new formula as "deeply flawed," suggesting it ignores the physical and demographic realities of the East Riding.

Councillor Redshaw stated:

"The proposed formula claims to be fair. It yet it fails to reflect the true costs faced by a council like ours. The east writing is effectively being penalized because the formula is deeply flawed and it ignores the real cost of delivering services across rural communities, the pressures of being a coastal authority and having disproportionately more retired residents with increasingly complex needs.

A formula then that ignores evidence. It's not fair and in our case it seems punitive."

Council Leader, Councillor Anne Handley, has also voiced "serious concerns," particularly regarding the formula's focus on areas of deprivation while neglecting the unique difficulties of delivering services across a vast rural setting. She noted that the authority is already grappling with soaring costs in adult social care and children’s services, while remaining "at the bottom of the pile" regarding Special Educational Needs and Disabilities (SEND) funding.

In response to the settlement, which makes the East Riding the fourth worst-hit unitary authority in the country, the council has resolved to demand a more transparent and evidence-based funding system from the government. In the meantime, the authority is undergoing a "full re-design" of its operations to become leaner and more sustainable.

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