Hammersmith and Fulham council tax could rise 150%

Hammersmith and Fulham council is considering a council tax increase of up to 150% as part of a plan to address a significant budget shortfall. A finance report prepared for the council's cabinet outlines this scenario, which would see residents of a Band D property paying an additional £29.11 per week, bringing their annual bill to £2,522.50. This potential rise is being explored in response to a projected 40% reduction in the council's £222 million annual budget, a consequence of the central government's Fair Funding review.

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The council's finance report states that the authority is "facing the biggest financial challenge in living memory." The Fair Funding review, according to the council, will reduce the cash it receives from Whitehall, particularly for local authorities with historically low council tax levels. This review is expected to force councils to increase bills to national average levels to compensate for funding gaps. Hammersmith and Fulham, along with several other London boroughs, has been granted permission to raise bills above the typical 5% cap next year to help balance their budgets.

The report presents three potential increases for the Hammersmith and Fulham element of the council tax for the 2027/28 financial year. A 100% increase would result in an annual Band D bill of £2,018.00, generating £113.2 million but leaving a £46.1 million shortfall. A 125% increase would raise the bill to £2,270.25 annually, bringing in £138.7 million and leaving a £20.6 million deficit. The 150% increase scenario, raising the bill to £2,522.50, is projected to generate £163.9 million and would broadly balance the budget based on current assumptions.

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Rowan Ree, Cabinet Member for Finance, stated in a letter to residents that efficiency savings alone would not be sufficient to close the budget gap, necessitating the exploration of all options. The council plans to launch a consultation to gather residents' views on council tax and potential service cuts. The council must make a decision regarding council tax increases by December 2026. While the report details specific scenarios, it is understood that these are not the only options being considered, and the council will also seek to implement budget savings.

A spokesperson for the Ministry of Housing, Communities and Local Government commented that local authorities determine their council tax levels but should prioritise taxpayers. The Ministry stated that councils should put taxpayers first when setting council tax levels.