Labour-run London borough considers UK's biggest ever council tax rise

A flagship Labour council in London will consider up to a 150% council tax rise on residents following sweeping cuts to its funding by central government.

Hammersmith and Fulham council will publish a report on Monday that outlines potential council tax increases for the borough's residents.

It includes the scenario of a whopping 150% increase in council tax that would mean residents of a Band D property would pay £2,522.50 a year, an increase of £29.11 a week.

This is the only council tax increase highlighted in the report, seen by the Standard, that would currently mean no budget shortfall at the cash strapped-council and would be Britain's biggest ever council tax rise.

The council has warned it is losing 40% of its £222 million annual budget under Labour’s “Fair Funding” review.

Ministers have argued that local authorities with “historically low” council tax levels will have the cash they receive from Whitehall slashed following the review, forcing them to bring bills into line with national averages to make up shortfalls.

Hammersmith and Fulham is the only Labour-led authority impacted by the government’s plans.

Hammersmith Bridge

PA

The finance report to be published on Monday, that will be considered by the council's cabinet, warns the council is "facing the biggest financial challenge in living memory."

It presents three scenarios of council tax increases that could be required for Hammersmith and Fulham's element of the council tax (which excludes the GLA precept) during 2027/28, in order to help close the budget gap.

The reports states:

• A 100% increase in the H&F council tax element (£2,018.00 a year at Band D) would bring in additional income by 2030/31 of £113.2m – leaving a budget shortfall of £46.1m. For a family in a Band D property that would mean an increase of £19.40 a week.

• A 125% increase in the H&F council tax element (£2,270.25 a year at Band D) would bring in additional income by 2030/31 of £138.7m – leaving a budget shortfall of £20.6m. For a family in a Band D property that would see an increase of £24.25 a week.

• A 150% increase in the H&F council tax element (£2,522.50 a year at Band D) would bring in additional income by 2030/31 of £163.9m – this broadly balances the budget on current assumptions. For a family in a Band D property that would see an increase of £29.11 a week.

No other scenarios are presented but it is understood that does not mean these are the only options for council tax rises that will be considered by the borough’s cabinet. The council is to seek to make budget savings.

The council must make a decision on council tax increases by December.

Hammersmith and Fulham is set to launch a consultation asking residents about council tax and potential cuts to services.

Cabinet member for finance, Rowan Ree, in a letter to residents, said: “The scale of the Government funding reduction over the next four years means our efficiency savings alone will not be enough to close this budget gap. As a result, we must look at all our options.

“I am determined Hammersmith and Fulham remains Britain's best value council.

“In Hammersmith and Fulham, people have services they simply wouldn't get if they lived elsewhere – from protecting residents during the cost-of-living crisis, to investing in young people and funding vital youth services and taking extra measures to cut crime and keep people safe.

“We have always strived to do things with residents, not to them.”

“We will soon ask for the views of all council taxpayers.”

In a letter to Andy Burnham last month, the Conservative leaders of Kensington and Chelsea, Westminster and Wandsworth councils urged a rethink to the funding review which means residents of those boroughs face huge council tax rises.

A spokesperson for the Ministry of Housing, Communities and Local Government said: "Local authorities decide the level of council tax they wish to set, but we are clear that in doing so they should put taxpayers first."