London Council Tax Hikes: Barnet, Bromley, and Lambeth Seek Increases 2026

Key Points

• Three additional London boroughs—Barnet, Bromley, and Lambeth—are seeking government permission to increase council tax above the standard 5% national cap.
• The local tax hikes are driven by significant funding shortfalls resulting from the controversial Fair Funding Formula, introduced by Angela Rayner in June of last year.
• Barnet Council is proposing a 32% council tax increase, which would raise the average Band D bill from £1,622 to £2,060 to help tackle a projected £200 million shortfall by 2030.
• Bromley Council is proposing an unspecified hike to offset a projected £30 million per year funding cut.
• Green-led Lambeth Council is facing a £130 million deficit by 2029-30 and is seeking an unspecified tax increase.
• Wandsworth and Hammersmith & Fulham councils have already received government approval for massive increases of 94% and 150% respectively.
• Other councils granted green-lights to raise bills above the cap include the City of London, Westminster, and Kensington & Chelsea.
• Prime Minister Andy Burnham’s Government faces mounting criticism that its funding reforms and upcoming policies—such as the 2028 “mansion tax” on properties valued over £2 million—will disproportionately impact the capital.

uk/london-news/">London, UK (West London Times) October 28, 2026 — Thousands of Londoners across multiple boroughs face severe council tax increases as local authorities struggle to plug multi-million-pound budget deficits triggered by central government spending rules and funding redistributions.

As reported by Niva Yadav of The Standard, councils in Barnet, Bromley, and Lambeth have formally asked the Government for permission to hike local council tax rates well above the standard 5% national cap. These unprecedented local tax rises are being pursued after authorities found themselves grappling with severe funding shortfalls following the rollout of the Fair Funding Formula.

What Led to the Funding Shortfall Across London Boroughs?

The controversial Fair Funding Formula, officially launched by Angela Rayner in June of last year, has drawn sharp criticism from local government leaders across the capital. Critics argue that the framework fundamentally miscalculates local revenue-raising potential while failing to account for mounting financial pressures such as rising homelessness and soaring social care costs.

As reported by Niva Yadav of The Standard, local authorities claim the formula reduces funding for areas deemed to have higher revenue potential, forcing councils to seek alternative revenue streams from local taxpayers. Commenting on the financial crisis facing his borough, Simon Radford, Barnet Council’s cabinet member for financial sustainability, told The Times that “the task is mammoth,” adding: “We need to find £200m of savings or cost avoidance within three years. We need to make some very painful decisions in the coming months and years, and to have a brutally honest conversation with residents.”

Barnet, in particular, has grown heavily dependent on £135 million in emergency loans from the government to steer clear of formal bankruptcy. The north London borough is now proposing a staggering 32% increase in council tax, which would push the average Band D bill up from £1,622 to £2,060. Highlighting the deep financial strain, a social media video shared by Barnet Council revealed that the local authority currently spends 18 times as much money on children’s services as it does on maintaining its public libraries.

How Are Bromley and Lambeth Responding to the Deficit?

Barnet is far from alone in confronting deep structural deficits. Bromley Council is likewise proposing an unspecified hike on council tax to offset a projected funding reduction reaching £30 million per year.

Addressing the harsh reality of the situation, council leader for Bromley, Colin Smith, told The Times: “The government’s decision to reduce Bromley’s funding by more than £30m by 2028 leaves us with no other viable option than to consider a higher-than-desirable council tax increase. That is the painful exercise we have had to embark on.”

Meanwhile, Green-led Lambeth Council is projected to face a massive £130 million deficit in its core funding by 2029-30, positioning it as the third local authority in this wave to pursue an unspecified tax increase above standard thresholds.

Which Other London Boroughs Have Received Approvals for Tax Increases?

The moves by Barnet, Bromley, and Lambeth follow similar actions taken by other London authorities. Wandsworth and fulham/hammersmith/">Hammersmith & Fulham councils have already secured government clearance for massive council tax increases earlier in the month—hiking bills by 94% and 150% respectively.

Hammersmith and Fulham previously outlined plans that could add £29 a week to local council tax bills. The Labour-led council concluded that it was losing more than half of its government grant under the Fair Funding framework. Alongside Wandsworth and Hammersmith & Fulham, the City of London, Westminster, and Kensington & Chelsea councils have also been given the green-light by Whitehall to raise bills above the 5% threshold.

What Is the Government’s Response to the Capital’s Financial Pressures?

The escalating financial crisis across the capital has intensified political pressure on Prime Minister Andy Burnham’s Government. Critics point out that upcoming fiscal policies, including the proposed “mansion tax” scheduled for 2028—which will levy an additional charge on residential properties valued above £2 million—will disproportionately penalise homeowners in London, where a significant share of high-value properties are concentrated.

In defense of government policy, a spokesperson for the Ministry of Housing, Communities and Local Government stated: “We’re fixing an outdated system so that funding goes where need is greatest, while protecting councils through the transition and ensuring no area faces a cliff edge.”

The department added: “For London councils, we’re making £11.5 billion available — that’s more than a 38 per cent increase since 2024-25 — in recognition of the particular pressures facing the capital, such as the high costs of temporary accommodation.”

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Background of the Particular Development

The current fiscal standoff between London local authorities and central government stems from structural reforms to local government finance designed to redistribute resources nationwide. For decades, traditional funding settlements relied on historical baselines that critics argued failed to reflect modern demographic shifts, urban deprivation, and escalating social care demands. The Fair Funding Formula was introduced to recalibrate grant distributions based on assessed relative needs and local tax-raising capacities.

However, because London boroughs possess higher nominal property values and council tax bases compared to many rural or northern counterparts, the formula assumes a greater local funding self-sufficiency. This assumption has led to sharp contractions in direct central government grants for numerous metropolitan authorities. Coupled with post-pandemic inflation, a severe shortage of affordable housing driving up temporary accommodation budgets, and statutory obligations in adult and children’s social care, London councils have experienced severe structural deficits. Consequently, local leaders argue they are caught between statutory insolvency and imposing heavy tax burdens on residents.

How This Development Can Affect London Taxpayers and Local Services

The ongoing proliferation of above-cap council tax increases carries profound financial implications for London residents and the broader municipal landscape. For taxpayers in boroughs like Barnet, Bromley, Lambeth, Wandsworth, and Hammersmith & Fulham, household budgets will face immediate tightening as utility bills, living costs, and municipal levies concurrently rise. Middle- and lower-income families who do not qualify for council tax support may find themselves under severe financial strain, potentially increasing default rates on local tax payments and straining household savings.

From a governance perspective, the reliance on extreme council tax hikes to bridge central funding gaps risks deepening regional inequalities within the capital itself, creating a postcode lottery where residents in poorly funded boroughs pay significantly more for basic local services. If local authorities are forced into drastic service reductions alongside tax increases—such as cutting library hours, youth provisions, and community maintenance—public satisfaction with municipal management will likely deteriorate. Furthermore, these fiscal pressures could accelerate demographic shifts, prompting families and businesses to relocate away from high-tax boroughs, ultimately altering the economic vitality of London’s local communities for years to come.