Residents in Westminster, a flagship London borough, face a potential increase of more than 50% in their council tax bills, according to The Standard. The Conservative-controlled Westminster City Council is grappling with a £100 million funding blackhole over four years, triggered by the Labour Government’s controversial overhaul of local government funding.
Funding shortfall and tax hike
Westminster City Council stressed that its central Government financial allocation is set to almost halve by 2029/30. Councillor Paul Fisher, the council’s Cabinet member for value for money and finance, stated: “The Government assumes we are now going to put up (the borough element) of council tax by 75 to 100 per cent to make up our immediate budget shortfall.” He added: “Whilst we have not yet settled on council tax levels for next year, this new financial climate is unprecedented and presents us with stark and very tough choices ahead where there are no easy options.”
Currently, council tax for a Band D property in Westminster is £1,047.85, comprising £537.34 charged by the borough and £510.51 for the Greater London Authority (GLA) precept. If the borough element doubled, it would add an extra £537.34, bringing the total to around £1,610, assuming the GLA increases its share by five percent. This equates to an overall 54% rise. Other bands would see similar percentage increases.
Government permission for higher increases
Ministers have granted six local authorities—Westminster, Kensington and Chelsea, Wandsworth, Hammersmith and Fulham, City of London, and Windsor and Maidenhead—permission to raise council tax by more than 5% over the next two years without a local referendum, as their central Government funding allocations are slashed. Westminster may implement one large increase in council tax in 2027/28 rather than spreading it over two years.
The previous Labour administration at the central London borough froze its core element of council tax for 2026/27 ahead of the May local elections, when the Tories regained control of the town hall.
Consultation and service cuts
The new council plans to consult Westminster’s 210,000 residents over the summer on which services they value most, given some face being cut back alongside the council tax rise. Cllr Fisher said: “Westminster City Council is known for providing high-quality services at a low cost and we are working flat out to make sure we spend every penny of taxpayers’ money wisely. But even with our extensive efficiencies and transformation plans, that won’t be enough to bridge the budget gap in future years. That’s why we now need to ask our residents the straight question - what council services do they care most about and would they be prepared to pay more in council tax to offer some potential protection against service cuts.”
Businesses in the borough already contribute more than £2.5 billion in business rates to Treasury coffers, with the council retaining just 1.9% of the sum raised. The council is pushing ahead with a £30 million savings programme this year, including through greater use of technology and AI.
