Hammersmith & Fulham Might Need to More Than Double Council Tax
Report to Cabinet lays out full impact of government's Fair Funding changes
Councillors are being told that a rise of 150% is currently needed to balance the budget. Picture: AI generated
October 5, 2026
Hammersmith & Fulham might be forced to hike council tax by an unprecedented 150 per cent to meet the shortfall resulting from deep cuts to its Government funding.
The Labour-led borough, which is due to see its grant funding slashed by more than half over the next four years, has said a rise equivalent to £2,500 year for a Band D property “broadly balances the budget on current assumptions”.
The potential 150 per cent rise is one of three scenarios detailed in a Cabinet paper due to go before lead councillors next week.
First reported by the Guardian, the paper details how Hammersmith and Fulham Council “is facing the biggest financial challenge in living memory” due to the Government’s Fair Funding reforms. Announced under Sir Keir Starmer’s premiership, the changes will see money redistributed among councils to take greater account of spending needs and their abilities to raise revenue.
While some of the capital’s authorities, such as Enfield and Croydon, will benefit from the changes, several Inner London councils are due to see their grant funding cut significantly.
Hammersmith and Fulham Council is one of six that have been given permission to increase council tax above the five per cent cap to help balance their books for the next two years. A Band D household in the borough currently pays £1,519.51 annually, including the £510.51 Greater London Authority (GLA) precept.
Westminster and Wandsworth have already warned of potential major tax rises, with the latter saying it may need to increase bills by 94 per cent from April.
Over the next four years Hammersmith and Fulham will see its funding cut by more than half, from £150.5m in 2025/26 to £72.4m in 2029/30.
The Cabinet paper states that “combined with changing demographics, rises in priority services costs, and inflation fuelled by national and global issues, this leaves us with an estimated £160m budget gap to fill.
“The effect of the new formula is to make a number of councils – like H&F – where council tax rates have been historically low, raise their council tax to the national average.”
Three scenarios are detailed showing “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”.
These are:
- 100 per cent increase in council tax, taking a Band D property to £2,018 a year. This would leave a budget shortfall of £46.1m
- 125 per cent increase in council tax, taking a Band D property to £2,270.25 a year. This would leave a budget shortfall of £20.6m
- 150 per cent increase in council tax, taking a Band D property to £2,522.5 a year, would balance the budget.
The council says it has already saved more than £150m since 2014, when Labour took power from the Conservatives, due to its ‘Ruthless Financial Efficiency’ programme.
It has also 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”.
Ministers argue the Fair Funding changes are necessary to fix an “outdated system”, though the scale of the cuts has led to significant concern among the authorities due to be hardest hit.
Hammersmith and Fulham notes the Government’s own deprivation figures list the borough as the 120th most deprived of England’s 296.
Wandsworth, Kensington and Chelsea and Westminster have written to Prime Minister Andy Burnham requesting a review of the scheme.
Hammersmith and Fulham’s Conservative opposition has accused the Labour administration of failing to get “even the most minor concession” from the Government.
Cllr Jose Afonso, the Conservative leader, said: “In August 2025, Labour Cabinet member Rowan Ree described my claims about council tax rises due to Labour Government funding reforms as “utter tosh”.
“Nothing’s changed since then. Despite having all three MPs and a majority on the council, they have failed to get even the most minor concession from their Labour Government for our residents.
“They are now floating the idea of 150 per cent council tax rises in the Guardian. They clearly knew they’d have to do that last year. So why did they cover it up?”
Hammersmith & Fulham Liberal Democrats have launched a petition against high tax rises.
Fergus Ustianowski, "Families across Hammersmith & Fulham are already struggling with the cost of living, and now Labour wants to double their council tax bill. Less than a year ago, Stephen Cowan promised residents he wouldn't do this. This rise is wrong, it is unfair, and we will oppose it every step of the way. That's why we're launching Axe the Hike, and I'd urge every resident to sign our petition."
The party argues that council tax is an unfair way to fund local services, and wants the council to open the books by publishing the full and final cost of the Civic Campus, whose increased costs were reported to cabinet in a confidential report, and setting out which of its £65.8 million in earmarked reserves are already committed and what could be used to protect residents
As part of the campaign, the local party is also submitting freedom of information requests on the Civic Campus, the council's Law Enforcement Team and its use of facial recognition.
The Labour group declined to comment.
A Ministry of Housing, Communities and Local Government (MHCLG) spokesperson previously said: “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 £78 billion available for council finances next year, with the majority of money un-ringfenced so local leaders can decide how best to spend on their local priorities.
“And we’re fixing an outdated funding system so funding goes where need is greatest, while protecting councils through the transition and ensuring no area faces a cliff edge.”
The paper is to be discussed at Cabinet on 12 October.
Ben Lynch - Local Democracy Reporter