Key Points

• As per the report published by Rajeev Syal of the West London Times, a leading Labour council, Hammersmith and Fulham Council, has issued a stark warning that it may have to raise the council tax by as much as 150% in order to fund public services at their present level.
• This is because of the funding cuts by the central government via the recently introduced funding settlement and the council’s cabinet has estimated in its report that an increase of this magnitude would add £29.11 a week to the council tax bills of Band D properties in 2027/28.
• According to the report by Rajeev Syal in West London Times, the west London council is losing out on more than half of the government grant as part of Labour’s “fair funding” review that was designed to redistribute money from rich areas to austerity-hit parts of the country.
• Ministers have claimed that the review would mean that councils with “historically low” council taxes would see their funding from Whitehall cut forcing them to match their bills with the national average.
• Hammersmith & Fulham Council is among those, including Westminster, Kensington and Chelsea, Wandsworth, City of London and Windsor & Maidenhead councils, allowed to set their bills higher than the usual 5% limit next year as a means of addressing the financial challenge following the imposed cuts.
• Currently, a Band D council tax payer in Hammersmith & Fulham Council pays £1,519 per year, an amount that incorporates the additional £510.51 City Hall levy, or GLA precept.
• As outlined in the West London Times, councillor Rowan Ree, who works as the cabinet member for finance and reform, said that the council is “facing the biggest financial challenge in living memory” due to the new funding formula.
• The council got £150.5m from the government in 2025/26, but this amount will soon be slashed by more than half to £72.4m in the coming four years.
• According to Rajeev Syal of the West London Times, the council report illustrates various scenarios which suggest that 100 percent increase in the council tax element would entail £2,018 a year in Band D (£19.40 increase per week), 125 percent increase would entail £2,270.25 a year (£24.25 increase per week), and 150 percent increase will entail £2,522.50 a year (£29.11 increase per week) to broadly balance the budget.
• Although the government believes that this formula ensures allocation of more funds in the regions that are less capable of raising taxes, the Labour councillors in Hammersmith and Fulham claim to keep their bills lower due to tight budgeting even when faced with large areas of deprivation, including the White City estate.
• In August, Conservative members of Kensington and Chelsea, Westminster and Wandsworth councils wrote a letter to Andy Burnham suggesting reconsideration of these proposals as these flawed deprivation measures pose a threat to the government’s goal to allocate funds according to the needs of the region.
• The spokesman of the Ministry of Housing, Communities and Local Government said: “Councils set the rate of the council tax they desire, but we are quite clear that when they do so, they need to prioritize their taxpayers.”

London (West London Times) October 3, 2026 – uk/local/fulham/hammersmith/">hammersmith-and-fulham/">Hammersmith and Fulham Council has issued a stark warning that it may be forced to implement an extraordinary council tax rise of up to 150% to sustain local services. The local authority’s cabinet report reveals that the sweeping financial pressures stem directly from central government grant reductions under a controversial new funding settlement, leaving local households facing weekly spikes of nearly thirty pounds.

Why Is Hammersmith and Fulham Council Considering a 150% Council Tax Rise?

As reported by Rajeev Syal of the West London Times, a flagship Labour authority has warned it may have to impose a 150% council tax rise on residents to maintain current services following central government cuts under a new funding settlement. Hammersmith and Fulham council’s cabinet has concluded in a report due to be published on Monday that such a rise would cost Band D households an additional £29.11 a week in the 2027/28 financial year.

As detailed by Rajeev Syal of the West London Times, the west London council has stated that it is losing more than half of its government grant under Labour’s “fair funding” review, which was introduced last year to redirect cash from affluent areas to places hit hardest by austerity. Ministers have argued that the review will mean that local authorities with “historically low” council tax levels will have the cash they receive from Whitehall slashed, forcing them to bring bills into line with national averages to make up shortfalls.

As highlighted by Rajeev Syal of the West London Times, Hammersmith and Fulham, alongside Westminster, Kensington and Chelsea, Wandsworth, City of London, and Windsor and Maidenhead councils, have been given powers to raise bills above the 5% cap next year to balance their budgets in the wake of the cuts. A household in Band D currently pays £1,519 annually, which includes the £510.51 City Hall surcharge, known as the Greater London Authority (GLA) precept.

What Did Financial Leaders Say About the Funding Crisis?

In a document seen by the West London Times, as reported by Rajeev Syal, the councillor Rowan Ree, serving as cabinet member for finance and reform, stated that the council was “facing the biggest financial challenge in living memory” under the new funding formula. The council received £150.5m in government funding in 2025/26, but this will be cut by more than half to £72.4m over the next four years.

As noted by Rajeev Syal of the West London Times, councillor Rowan Ree stated:

“Various scenarios in this report show the deep extent that Hammersmith and Fulham council could be required to raise its element of the council tax (which excludes the GLA precept) during 2027/28.”

The financial scenarios outlined in the document include:

• A 100% increase in the Hammersmith and Fulham council tax element, bringing the total to £2,018 a year at Band D, which would leave a budget shortfall of £46.1m. According to the document cited by Rajeev Syal of the West London Times, “For a family in a Band D property that would mean an increase of £19.40 a week.”
• A 125% increase in the council tax element, reaching £2,270.25 a year at Band D, leaving a remaining budget shortfall of £20.6m. As reported by Rajeev Syal of the West London Times, for a family in a Band D property that would represent an increase of £24.25 a week.
• A 150% increase in the council tax element, resulting in £2,522.50 a year at Band D, which would broadly balance the budget on current assumptions. As reported by Rajeev Syal of the West London Times, a family in a Band D property would face an increase of £29.11 a week.

How Does the Government’s Fair Funding Review Justify the Changes?

As reported by Rajeev Syal of the West London Times, under rules set by Angela Rayner at the start of last year, cash was supposed to be redirected from affluent rural areas to urban councils hit hardest by austerity. Ministers said the changes put in place a fairer system that recognized the extra needs and weaker council tax-raising powers of councils in “left-behind” areas.

However, as reported by Rajeev Syal of the West London Times, Hammersmith and Fulham’s Labour councillors argue that they have kept bills low with “ruthless” cost cutting in a borough that has significant areas of deprivation, such as the White City estate. They claim that the council’s inclusive economic growth strategy, Upstream London, has attracted more than £6bn of investment into the borough and created 17,200 jobs.

Furthermore, as noted by Rajeev Syal of the West London Times, London boroughs affected by the formula argue that flawed deprivation measures risk undermining the government’s aim of ensuring funding follows need. In a letter to Andy Burnham in August, the Conservative leaders of Kensington and Chelsea, Westminster and Wandsworth councils urged a rethink of the proposals.

In response to the developments, a spokesperson for the Ministry of Housing, Communities and Local Government stated, as reported by Rajeev Syal of the West London Times:

“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. We’ve made over £78bn available for council finances next year, with the majority of money unringfenced so local leaders can decide how best to spend on their local priorities.”

Background of the Particular Development

The announcement follows the implementation of the government’s “fair funding” review, initiated by Deputy Prime Minister Angela Rayner. Designed to reallocate resources from more affluent local authorities to urban and deprived communities suffering from years of austerity, the revised framework adjusted grant allocations based on relative needs and local tax-raising capacity. Historically, certain London councils kept council tax levels low through efficient financial management, asset generation, and commercial investment strategies. Under the updated formula, Whitehall assumed these lower council tax baselines meant authorities possessed greater capacity to absorb cuts, leading to significant reductions in central government block grants for boroughs like Hammersmith and Fulham, alongside neighboring west and central London authorities.

Prediction

This development could severely affect local taxpayers, particularly residents living in Band D and higher-value properties across Hammersmith and Fulham, who face the immediate prospect of weekly council tax increases ranging from £19.40 to over £29.11 should the local authority implement the maximum projected hikes to close its multi-million-pound budget gap. Beyond immediate household financial strain, the situation may trigger wider political friction between local Labour administrations and central government ministries over how deprivation and funding needs are calculated in urban environments. If other affected London boroughs follow suit with steep increases, residents across the capital could see a sharp divergence in local taxation rates, potentially prompting increased demand for council support schemes and intensifying public scrutiny over local government expenditure and fiscal sustainability.