Cash-strapped London councils planning biggest ever tax rise

By the Editorial Team · Wednesday, August 19, 2026

Several London councils, including Wandsworth and Westminster, are considering council tax increases of up to 160 percent to address large budget deficits caused by reduced government funding. These hikes could significantly raise residents' annual bills from April, underscoring the severe financial challenges faced by local authorities in maintaining essential services.

Cash-strapped London councils are considering unprecedented increases in council tax, with some authorities proposing rises of up to 160 percent to address significant budget shortfalls. These potential hikes could result in residents paying several hundred pounds more annually from April next year.

Wandsworth Council, controlled by the Conservative Party, is reportedly debating a possible increase of up to 160 percent, which would raise the average annual council tax for Band D properties by approximately £814—nearly doubling the council element of the charge. At present, Wandsworth residents in this category pay around £1,020 annually, among the lowest rates in England. A rise of this magnitude would push the total annual bill, including Greater London Authority (GLA) charges, to around £1,834.

Similarly, Westminster Council has indicated it may seek to raise council tax by as much as 100 percent, potentially increasing bills by more than £500 per year. Other London boroughs and local councils in the South East are reportedly facing substantial tax rises as they grapple with combined funding gaps estimated to reach £7 billion over the next three years.

Wandsworth’s deputy leader, Conservative councillor Peter Graham, attributed the financial crisis partly to changes in the funding formula introduced by Housing Secretary Angela Rayner, which reallocated Whitehall funding in a way he contends disproportionately affects councils that have historically kept taxes low. Graham also pointed to a £137 million budget shortfall that the council faces and criticized the prior Labour administration for leaving a "budget hole." He emphasized efforts to limit any tax increase to the lowest feasible level.

Labour councillors in Wandsworth strongly criticized the scale of the proposed increases, describing them as “begg[ing] belief.” The local Labour leader, Simon Hogg, argued that the new Conservative leadership lacks a coherent plan for managing the council's finances.

Wandsworth is one of six councils—along with Westminster, Kensington and Chelsea, Hammersmith and Fulham, the City of London, and Windsor and Maidenhead—that have received special permission to exceed the standard 5 percent cap on council tax rises. This exemption reflects the unique financial pressures these local authorities are experiencing amid significant reductions in central government funding.

No final decisions have been made, but the prospect of steep tax increases highlights the financial strain confronting London’s local governments. Many councils are balancing the need to maintain essential services against the political and economic impact such rises may have on residents.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.