London councils face budget pressures amid proposed tax changes

Local authorities in London are facing significant financial pressures, leading to proposals that could increase the tax burden on residents.

Waltham Forest Council is considering a 10% reduction in council tax support for vulnerable residents, including those with children under five or limited capability for work. The proposal, currently under consultation, aims to save the council £970,000 annually. While the council notes that 2,343 households might receive more assistance, approximately 7,079 households are expected to receive less support. To mitigate financial difficulties, the council plans to maintain a £750,000 hardship fund.

In West London, Hammersmith and Fulham Council has warned it may need to implement a council tax increase of up to 150% by 2027/28 to maintain services. This warning follows a central government funding review that is expected to reduce the council’s government grant from £150.5 million in 2025/26 to £72.4 million over the next four years. The council described the situation as the “biggest financial challenge in living memory” due to the redirection of funds under the new national funding formula.