Average Band D council tax bills are expected to exceed £2,000 in every London borough except Tower Hamlets from April 2027, as councils seek substantial increases to cover gaps in their finances. The forecast would bring bills above that threshold across almost the whole capital for the first time.
The analysis, published on 9 November, comes as boroughs assess the consequences of the Government’s Fair Funding Review. The changes have sharply reduced central funding for councils with historically low council tax, prompting requests for permission to raise bills beyond the usual 5 per cent cap.
The figures remain forecasts and proposals, rather than final settlements. But they indicate the scale of the decisions facing town halls, with some considering large tax increases alongside spending cuts while others pursue discussions with ministers.
Large increases proposed
Wandsworth has said it is likely to impose a 94 per cent rise, adding about £958 to the bill for a Band D home. It is among the boroughs seeking permission to exceed the usual limit, together with Westminster, Kensington and Chelsea, and Hammersmith and Fulham.
Kensington and Chelsea is consulting on a 70 per cent increase alongside £65m of proposed cuts. Those proposals bring together higher household bills and lower council spending, rather than treating a tax rise as a replacement for reductions in services.
Hammersmith and Fulham has said bills would need to rise by 150 per cent to close its funding gap. That is a statement of the increase needed to balance its finances, not confirmation that such a rise has been approved or will be imposed.
The distinction matters for residents trying to understand what they may have to pay. Requests for exceptional increases, consultation proposals and estimates of the money needed are different stages of the budget process. None should be read as a final council tax demand.
For boroughs that have historically charged less, a large percentage increase begins from a lower base. Even so, the additional amount forecast in Wandsworth shows the potential practical impact on household budgets if the proposed rise proceeds.
Funding changes challenged
The dispute centres on how central government funding is distributed between councils. Council tax is the main lever available to boroughs facing the costs of social care and temporary accommodation, making changes to grant funding particularly significant for their budgets.
Three of the boroughs seeking exceptional increases are exploring a legal challenge to the funding changes. That remains a potential challenge, rather than an established court case or a ruling on the fairness of the review.
Barnet is also in talks with ministers, seeking a 32 per cent increase, around £500, to help close a £200m budget gap. Bromley and Lambeth have held discussions too, although no proposed increases for those boroughs are specified in the figures.
The negotiations underline how widely the financial pressures extend. They involve both councils facing sharp changes to central funding and boroughs seeking ways to bridge substantial gaps between their resources and spending requirements.
Pressure across the capital
London Councils estimates that the capital’s boroughs face a collective funding shortfall of £5.2bn by 2030. Nine London boroughs have received emergency financial support in the past 12 months, showing that the strain on council finances is already affecting budget decisions.
A household’s council tax bill includes both the borough charge and the Mayor’s precept. The latter is currently £510.51 for a Band D household, having risen by £20.13, or 4.1 per cent, in 2026. The borough’s own charge is therefore not the whole bill residents receive.
Band D is the standard benchmark used to compare council tax between areas. The forecast does not mean every household will pay the same amount: bills depend on the property’s council tax band and any applicable discounts or support.
The immediate questions are whether ministers permit exceptional increases, how councils respond to their consultations and whether the proposed legal challenge proceeds. Until those decisions are made, the April 2027 forecast signals the likely direction of bills, not a confirmed charge for each household.
