Labour Accused of Misleading £43m Cash Claim

Reading Labour has been accused of ‘misleading the public’ over a claimed £43 million cash injection into the council from the government.

In January, Prime Minister Sir Keir Starmer visited Emmer Green Youth and Community Centre to announce a freeze in rail fares and push multi‑year funding for local councils. The boost was welcomed by Reading’s three Labour MPs: Matt Rodda (Reading Central), Olivia Bailey (Reading West and Mid Berkshire) and Yuan Yang (Earley and Woodley).

But critics say the headline figure mostly comes from council tax rather than central government cash — a point admitted at a full council meeting.

Councillor Dave McElroy (Green, Redlands) told the meeting: “Earlier this year Keir Starmer visited Reading and, much to the delight of our three Labour MPs, announced that Reading Borough Council will receive nearly £43m from the government for essential services.

“The MPs took the opportunity to criticise the previous government for underfunding councils and celebrated the real difference that this money will make to our communities.

“Given this miracle, you can imagine my surprise when the budget papers came out and not only do they include more cuts (again), but also a big increase in Council tax (again).

“Can the council leader tell us, is Reading really getting a £42.8m ‘cash injection’ from the government? Where does the money come from that makes up that four‑year figure?”

The council leader, Councillor Liz Terry (Labour, Coley), replied: “The £42.8m is a combination of £34.4m that the Council is able to collect through Council Tax, plus an additional £8.4m of Central Government funding.

“This was based on the provisional Local Government funding figures announced in December.

“The good news is that following the announcement on 9th February of additional funding for Homelessness prevention, the headline figure has now increased to £44.9m, and the additional central government funding is now £10.5m.”

After that answer, Cllr McElroy said: “Thank you to the council leader for correcting the record after we were so badly misled by our Labour MPs.

“By ‘able to collect through council tax’ do you actually mean council tax rises, that three quarters of that new money was actually just council tax rises?

“And in projecting into the future, are they and you confirming that the council is already planning to raise council tax by 4.99 per cent over the next how many years?”

Cllr Terry replied: “I can confirm that the government settlement across the whole country for local government is that it was looked at as a core spending increase, therefore increasing council tax by 4.99 per cent.

The exchange came during the full council meeting on Tuesday 24 February, when the budget for 2026/27 and the 4.99% council tax rise were approved. Labour councillors and Cllr Sarah Hacker (Independent, Battle) voted for it; Green, Conservative, Liberal Democrat councillors and Cllr Clarence Mitchell (Reform, Emmer Green) voted against.

Speaking after the meeting, Cllr Dave McElroy (Green) said: “I’m shocked that we could be so badly misled by our Labour MPs. Well, not that shocked, I guess.”

James Aldridge, Local Democracy Reporter