London boroughs face steep council tax hikes as funding cuts force record bills

Analysis shows that after an average £87 council-tax increase in 2026, London’s boroughs are preparing for far steeper hikes in 2027 as funding cuts strain local budgets. The Labour-led Fair Funding Review has identified four boroughs plus the City of London as needing historically low rates brought up to national averages, prompting proposals ranging from 5% to 150% rises. Councils such as Hammersmith and Fulham say a 150% increase is required, while others like Lambeth and Southwark are in talks with the Ministry of Housing, Communities and Local Government, led by Angela Rayner, for permission to exceed the statutory cap. Emergency cash injections have helped some, but rising social-care and temporary-housing costs threaten bankruptcy, forcing most boroughs to set annual Band D bills above £2,000, with Tower Hamlets possibly remaining just below that level.