Hammersmith and Fulham Council is considering raising its share of council tax by as much as 150% in 2027/28 after a sharp reduction in central government funding. The increase would add £29.11 a week to the bill for a Band D household and, under the council’s current assumptions, would broadly balance its budget.
The Labour-run west London authority says it is facing what its finance report describes as the “biggest financial challenge in living memory”. According to The Guardian, the council received £150.5 million in government funding in 2025/26, but that figure is set to fall to £72.4 million over the next four years under the government’s “fair funding” review.
The change forms part of a wider overhaul intended to direct more funding towards areas judged to have greater need and weaker capacity to raise money locally. Hammersmith and Fulham, which has historically kept council tax relatively low, is among six authorities given powers to raise bills above the usual 5% cap next year.
Three Council Tax Scenarios Set Out in Finance Report
The council’s report presents three possible increases for its own element of council tax, excluding the Greater London Authority precept. Each option is designed to reduce the gap between falling government support and the cost of maintaining current services.
According to the Evening Standard, a 100% increase would take the Hammersmith and Fulham element of Band D council tax to £2,018 a year. That option would generate an additional £113.2 million by 2030/31 but would still leave a £46.1 million budget shortfall. For a Band D household, the increase would amount to £19.40 a week.
A 125% rise would increase the Band D figure to £2,270.25 a year. The council estimates that this would generate £138.7 million in additional income by 2030/31 while leaving a remaining shortfall of £20.6 million. The weekly increase for a Band D household would be £24.25.
Under the largest scenario, a 150% rise would take the council’s Band D element to £2,522.50 a year. It would generate £163.9 million in additional income by 2030/31 and, on the council’s current assumptions, broadly close the budget gap. The weekly increase would be £29.11. The report does not state that these are the only options available. The council is also considering further savings and plans to consult residents before a final decision is made.
Council Challenges Funding Changes As Ministers Defend Review
Hammersmith and Fulham says the scale of the funding reduction cannot be absorbed through efficiency measures alone. Councillor Rowan Ree, the cabinet member for finance and reform, said the authority had already saved £156 million since 2014 through its “Ruthless Financial Efficiency” programme.
According to The Independent, Ree said the council was continuing to challenge the government’s approach while preparing options needed to meet its legal duty to produce a balanced budget. He said the reduction could be equivalent to losing as much as 40% of the council’s £222 million annual budget, while demand and service costs continue to rise.
The government has defended the new settlement. A Ministry of Housing, Communities and Local Government spokesperson said local authorities decide the level of council tax they set and should “put taxpayers first”.
The department also said more than £78 billion had been made available for council finances next year, with most of the funding not ringfenced. Ministers say the revised system is intended to direct funding towards areas where need is greatest while protecting councils during the transition. Hammersmith and Fulham is expected to consult council taxpayers before making its decision on next year’s increase by December.
