Hammersmith and Fulham warns it may raise council tax by 150% to plug funding gap

Hammersmith and Fulham council has warned it may have to raise council tax by as much as 150% to preserve current services after a new central government funding settlement, according to a cabinet report due to be published on Monday.

The council said the proposed increase would add about £29.11 a week to a Band D household in 2027/28. The authority described the situation as the “biggest financial challenge in living memory,” saying the change in funding from central government has created a significant shortfall that could force dramatic measures to avoid cutting services.

Why the increase is under consideration

The council frames the possible rise as a last resort to maintain existing levels of services in the face of reduced funding from central government under the new settlement. The cabinet has set out the figures and options in a report planned for publication on Monday, the council said.

Hammersmith and Fulham is a flagship Labour authority; the warning follows similar signals from other London councils. According to the Independent, Wandsworth and Westminster have also warned the government that they may need to raise council tax considerably to respond to funding pressures.

What this would mean for residents and services

If implemented at the scale the council has outlined, the increase would substantially raise household bills: the council’s calculation for 2027/28 puts the extra cost to a Band D property at £29.11 per week. Council leaders say the alternative to such a rise would be cuts to services, although the report focuses on the financial arithmetic rather than listing specific service reductions.

Political and fiscal context

The council linked the prospect of a large rise directly to cuts in the amount of funding it expects to receive from central government through the new local government funding settlement. The authority has framed its assessment as a response to that settlement rather than a policy preference.

Officials intend to publish the cabinet report setting out the council’s assessment and options on Monday. The publication is likely to sharpen debate between local and central government over the adequacy of funding for councils and the balance between council tax and service provision.

What happens next

The cabinet report’s publication should clarify the council’s timetable and any formal consultation process. Any actual change to council tax would require the normal budget-setting and approval procedures, and could be subject to political negotiation and public response.

For now, the council’s warning signals the scale of the financial pressure some local authorities say they face under the new funding arrangements and sets up a potential dispute over how the shortfall should be addressed.