London councils are weighing steep council tax increases, with one borough considering a 150% rise as revised Government funding leaves authorities struggling to balance budgets. Barnet, Bromley and Lambeth have asked ministers for permission to exceed the usual 5% cap, while Hammersmith and Fulham is considering a potential 150% hike and Wandsworth plans a 94% increase.
Funding formula shifts hit affluent boroughs
The proposals follow changes to how central Government distributes money to local authorities, with the new funding formula directing resources towards areas assessed as having greater deprivation and social care needs. Historically affluent councils, particularly in London and the South East, now face substantial shortfalls despite previously keeping council tax relatively low.
Barnet is in talks with the Government over a potential 32% increase, which would take the average Band D bill from £1,622 to £2,060. The Labour-run borough faces a projected £200 million shortfall by 2030, driven by reduced Government funding and rising social care costs. It has relied on £135 million in emergency Government loans over the past two years to avoid bankruptcy.
Boroughs outline painful choices
Simon Radford, the council's cabinet member for financial sustainability, said: “The task is mammoth. We need to find £200m of savings or cost avoidance within three years. We need to make some very painful decisions in the coming months and years, and to have a brutally honest conversation with residents.”
Conservative-run Bromley is proposing an unspecified increase above 5% to offset funding cuts expected to reach more than £30 million a year by 2028–29. The average Band D bill currently stands at £1,629. Council leader Colin Smith said: “The government's decision to reduce Bromley's funding by more than £30m by 2028 leaves us with no other viable option than to consider a higher-than-desirable council tax increase. That is the painful exercise we have had to embark on.”
Lambeth and Wandsworth face gaps
Lambeth faces a projected £130 million funding gap by 2029–30 and has been discussing an increase above 5%. The council said no decision had been made on council tax rates for 2027–28 and called on ministers to reverse funding cuts.
The Times reports that Hammersmith and Fulham is weighing a 150% increase to help fill a £78 million funding gap by 2029–30. The proposed rise would add around £29 a week to the average Band D bill. The figure relates to the council's own share of council tax, rather than the entire bill, and remains under consideration.
Wandsworth plans a 94% increase next year, potentially adding £958 to the average Band D bill. The Conservative-led council has blamed an £80 million cut in central Government funding and overspending by the previous Labour administration. Its average Band D bill is currently £1,020, the lowest in the country.
Wider increases and Government response
Kensington and Chelsea, Westminster and the City of London are also planning double-digit increases, while Windsor and Maidenhead is reportedly considering a 25% rise.
The Ministry of Housing, Communities and Local Government said: “We're fixing an outdated system so that funding goes where need is greatest, while protecting councils through the transition and ensuring no area faces a cliff edge.” It added: “For London councils, we're making £11.5bn available - that's more than a 38% increase since 2024-25 - in recognition of the particular pressures facing the capital, such as the high costs of temporary accommodation.”
