Council tax will rises London councils opt for maximum tax increase

29 of the 32 of London’s local authorities will be increase council tax bills next financial year by just under 5%, the maximum allowed without a local referendum.

Barnet Council will increase its council tax by 4.98%, while 28 other London boroughs and the City of London have levied maximum council tax increases of 4.99% from 1 April.

Residents in Wandsworth will see their bills rise by 2%, while council tax in Kensington and Chelsea will go up by 4%.

Newham Council, which applied for extra support last year due to housing pressures from temporary accommodation, was allowed by central government to raise its bills by 8.99% in 2025-26.

The 4.99% cap on council tax rises in England, which includes a 2% rise for adult social care, has been in place for the last three years.

Usually a borough that wants to raise tax more than the cap has to hold a local referendum to approve the rise, but central government can authorise a higher increase.

Seven London boroughs will also receive Exceptional Financial Support loans from the government of more than £418m for the next financial year.

London Councils, an umbrella body for the capital’s local authorities, said boroughs in the capital received about 28% less in funding per Londoner compared to 2010.

It is calling for overall council funding to be restored to 2010 levels by 2028-29, requiring real-terms increases of 4% every year.

London Councils said emergency borrowing measures like Exceptional Financial Support put a burden on boroughs of further debts and would not be enough to return them to a stable financial footing.

It added a combination of fast-rising demand for statutory services – where boroughs have a legal duty to provide support – and the increasing cost of delivering these services had led to substantial overspends in London council budgets in recent years.

A spokesperson for the Local Government Association, which represents councils across England, said councils continued to face “severe funding shortages and soaring cost and demand pressures on local services”.

They added that councils had to make a “tough choice” about increasing bills to bring in “desperately-needed” funds.

“However, while council tax is an important funding stream, the significant financial pressures facing local services cannot be met by council tax income alone.

“The Spending Review needs to ensure councils have adequate funding to deliver the services local people want to see.”

A Ministry of Housing, Communities and Local Government spokesperson said councils should “put taxpayers first and carefully consider the impact of their decisions”.

“That’s why we are maintaining a referendum threshold on council tax rises, so taxpayers can have the final say and be protected from excessive increases,” they added.