Key facts
- Hammersmith and Fulham council may raise council tax by 150% to balance its budget.
- A 150% increase would add £29.11 weekly for Band D households by 2027/28.
- The council's government funding is set to decrease from £150.5m to £72.4m over four years.
- The proposed funding changes are part of a 'fair funding' review by the central government.
- Other affluent London boroughs also face potential bill increases above the 5% cap.
Hammersmith and Fulham council, a Labour-led authority in west London, has warned it may be forced to increase council tax by up to 150% to maintain essential services. This potential rise, which would add £29.11 per week for Band D households by 2027/28, stems from significant cuts to central government funding under a new settlement.
The council's cabinet has concluded in a report that the funding changes, part of a "fair funding" review introduced last year, will slash its government grant by more than half over the next four years, from £150.5 million in 2025/26 to £72.4 million. Ministers contend that this review aims to redirect funds from affluent areas to those most impacted by austerity, arguing it will compel councils with historically low tax rates to increase bills to meet national averages.
Several affluent councils, including Westminster, Kensington and Chelsea, and Wandsworth, have been granted permission to raise bills above the usual 5% cap next year to balance their budgets. However, Hammersmith and Fulham's Labour councillors argue that despite areas of deprivation within the borough, they have maintained low bills through "ruthless" cost-cutting and have attracted significant investment. They claim the current deprivation measures used in the funding formula are flawed and risk undermining the government's goal of aligning funding with need.
In a letter to Andy Burnham, leaders of Kensington and Chelsea, Westminster, and Wandsworth councils urged a reconsideration of the proposals. A spokesperson for the Ministry of Housing, Communities and Local Government stated that while local authorities set council tax levels, they should prioritize taxpayers, adding that over £78 billion is available for council finances next year.