Opposition Call for Council to 'Come Clean' on Finances
Borough already £14.3 million over budget after two months
Cllr Liam Downer-Sanderson, Shadow Cabinet Member for Finance and Reform
September 28, 2026
A Hammersmith & Fulham opposition councillor has told the local authority to “come clean” on its finances after it forecast a £14.3 million overspend two months into the new year.
Cllr Liam Downer-Sanderson, Shadow Cabinet Member for Finance and Reform has written to the Labour-led administration requesting further details on the projected overspend, stating residents deserve to know how future savings will be found.
“The immediate question is simple,” he wrote. “How has the council gone from approving a balanced budget to forecasting a £14.3 million overspend within a matter of months and what will that mean for council tax and services?”
A Hammersmith and Fulham Council spokesperson said the local authority has reduced spending by £156m over the last 12 years, since Labour was elected to form the administration.
They added these savings have enabled investments to be made “where it matters most”, improving and protecting essential services.
At a Hammersmith and Fulham Council Cabinet meeting last week a paper was presented outlining the local authority’s financial performance as of May, the second month of the 2026/27 financial year.
In February the council approved a balanced budget for the current financial year, starting April 1, alongside a hike to council tax and the social care precept by a combined 4.99 per cent.
The Cabinet paper, which was noted by members, included forecasts of the council’s finances for 2026/27 based on “emerging budget pressures and potential risks”.
A total overspend was projected of £14.37m, driven by rising costs in areas such as supported living and temporary accommodation.
Council officers wrote: “A combination of increasing complexity and acuity of need for those in care, an ageing population, lack of supply of suitable accommodation and the impact of high interest rates and above target inflation continue to place pressure on the council’s finances.
“Combined with the impact of Fair Funding Review 2.0 and the reset of the Business Rates Retention System from April 2026, this Council will continue to face financial challenges in the years to come. The Council continues to retain a good level of balances/reserves to ensure future financial resilience.”
In his letter to Cllr Rowan Ree, Cabinet Member for Finance and Reform, Cllr Downer-Sanderson wrote that challenges such as inflation and increasing demand were known risks when the budget was set.
“The scale of the deterioration within months of approving the budget therefore requires a clear explanation,” he wrote
Cllr Downer-Sanderson also queried why, when Cllr Ree and senior finance officers appeared before the authority’s Public Sector Reform PAC on July 21 to discuss the budget, the overspend was not raised, given the financial impact of the month two report was signed off on June 12.
“The implications for council tax are serious,” he continued. “The current £14.3m overspend alone is equivalent to around 15 per cent of the £92.6m the council expects to raise through council tax this year.
“That pressure comes before the full impact of the Labour Government’s Fair Funding reforms, which the council forecasts will contribute to a funding gap of up to £69m by 2028/29.”
Referring to the report’s note that tighter spending controls may be required alongside identifying services that could “cease or reduce”, Cllr Downer-Sanderson added: “Residents deserve to know which services are being considered, whether reserves will be used to close the gap and, if not, where the necessary savings will be found.”
Speaking to the LDRS, Cllr Downer-Sanderson said: “Being £14m over budget just two months into the financial year is cause for serious concern on its own. But combined with the impact of the Labour Government’s Fairer Funding reforms, the consequences for residents, both on council tax and services, could be very severe indeed.”
Hammersmith and Fulham Council has previously been praised for its stewardship of the borough’s finances.
A peer review by the Local Government Association (LGA) published in July 2025 found the authority to be “very ambitious and financially well-run”.
“LBHF’s [London Borough of Hammersmith and Fulham] strong focus on ‘being ruthlessly financially efficient’ is led and supported by very capable members and officers,” the report’s executive summary read.
“It was clear that there is a high level of political support for, and challenge of, financial management. Robust financial governance is supported by a management culture that recognises the importance of value for money.”
Commenting on Cllr Downer-Sanderson’s letter, a Hammersmith and Fulham Council spokesperson said: “Over the past 12 years we have worked with ruthless financial efficiency to reduce our spending by £156m. We have achieved these savings by continually remodelling and improving our services to reduce inefficiency and ensure we are genuinely meeting the needs of residents.
“Our ‘Ruthless Financial Efficiency’ programme has allowed us to invest where it matters most to protect and improve essential services for the future.”
Hammersmith and Fulham is one of several Inner London councils due to see their grant funding significantly reduced under the Government’s Fair Funding reforms.
Kensington and Chelsea, Westminster and Wandsworth have all written to Prime Minister Andy Burnham requesting he review the scheme. If not, they say they will seek legal action.
The City of London Corporation has also revealed it is looking at a potential appeal under the Sustainable Communities Act.
Six councils, including Hammersmith and Fulham, have been given special dispensation to increase local taxes by more than five per cent without a referendum for the next two years.
Wandsworth has already said it could hike council tax by 94 per cent. Hammersmith and Fulham is yet to announce any tax plans for 2027/28.
Ben Lynch - Local Democracy Reporter