Council tax bombshell: Bills 'to rise 54%' in flagship London borough hammered by Labour funding reforms

Exclusive: Westminster is having to plug a £100 million funding shortfall and will also have to cut services to balance its books Residents in a flagship London borough face an increase of more than 50% in their council tax bills, The Standard can reveal. Westminster City Council is having to plug a £100 million blackhole in its finances over four years following the Labour Government’s controversial shake-up of local government funding. The borough stressed that its financial allocation from central Government is set to almost halve by 2029/30. "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,” said Councillor Paul Fisher, the council’s Cabinet member for value for money and finance. “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.” Council tax in Westminster is currently £1,047.85 for a Band D property, made up of £537.34 charged by the borough, and a further £510.51 in Greater London Authority precept. If the borough element doubled it would mean an extra £537.34, taking the total to around £1,610, assuming the GLA increased its share by five per cent, or an overall 54% rise. Ministers have given six local authorities, including 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 do one huge increase in council tax in 2027/28 rather than spread 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 won back control of the town hall. The new council is to consult the borough’s 210,000 residents over the summer on what services they value most given some of them face being cut back, combined with 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 story has drawn attention across the politics landscape, with experts pointing to its immediate implications for policy, markets, and public confidence.

Beyond the headline update, analysts are closely watching how institutions and local stakeholders respond over the next week as timelines, priorities, and accountability measures become clearer.

For readers, this development is part of a broader shift that has been unfolding over recent months, and the next round of announcements will likely define its long-term impact.