Hammersmith and Fulham Council, a Labour authority, has indicated it may need to impose a 150% council tax increase on residents to sustain current services. This follows central government cuts under a new funding settlement.
A report from the council's cabinet, due to be published on Monday, concluded that such a rise would mean an additional cost of £29.11 per week for Band D households in 2027/28. The council currently receives £150.5m in government funding, which is expected to be reduced by more than half to £72.4m over the next four years.
The west London council states it is losing over half of its government grant due to Labour’s “fair funding” review, introduced last year to reallocate funds from affluent areas to those most affected by austerity. Ministers have argued this review aims to bring council tax bills in areas with historically low levels in line with national averages.
Hammersmith and Fulham, along with Westminster, Kensington and Chelsea, Wandsworth, City of London, and Windsor and Maidenhead councils, have been granted powers to raise bills above the 5% cap next year to balance their budgets. Councillor Rowan Ree, cabinet member for finance and reform, stated the council is "facing the biggest financial challenge in living memory" under the new funding formula.
The Ministry of Housing, Communities and Local Government commented that local authorities determine their council tax levels and should prioritise taxpayers. They added that over £78bn has been made available for council finances next year, with most of it unringfenced for local leaders to allocate.