Hammersmith and Fulham Council has warned that it may have to increase council tax by 150% due to Government cuts under the new funding settlement.
The Government’s ‘Fair Funding 2.0’ formula means funding for the London authority will fall from £150.5m in 2025/26 to £72.4m over four years, leaving an estimated £160m budget gap, according to a report for the council’s cabinet.
The council is considering three potential council tax increases. A 150% rise in the council's element of council tax would mean a Band D charge of £2,522.50 a year, an extra £29.11 a week, and would broadly balance the budget. Rises of 100% and 125% would leave shortfalls of £46.1m and £20.6m.
Hammersmith and Fulham Council is one of six councils given powers to raise council tax without limit for two years.
The council says its ‘Ruthless Financial Efficiency’ programme, which was introduced in 2014, saved £156m and enabled the council to give residents the third lowest council tax bills in the country.
However, it argues these savings are not sufficient in light of the Government's fair funding reforms.
Cllr Rowan Ree, Hammersmith and Fulham Cabinet Member for Finance and Reform, said: ‘The scale of the Government funding reduction over the next four years means our efficiency savings alone will not be enough to close this budget gap. As a result, we must look at all our options.’
‘We will soon ask for the views of all council taxpayers to ensure your voice is heard as we work to protect the services you value the most,’ he added.
The cabinet will consider the options on 12 October.
Further reading
