Wandsworth Council proposes 94% Council Tax hike to address budget deficit

Wandsworth Council proposes 94% Council Tax hike to address budget deficit

Wandsworth Council is facing a potential 94% Council Tax hike in 2027/28 as part of a drastic Medium-Term Financial Strategy to address a significant budget gap.

The Finance Overview and Scrutiny Committee on Thursday 8 October 2026 heard that the council's financial sustainability is threatened by a substantial reduction in government funding. Specifically, there is a projected 40% reduction in general grant funding from the government, amounting to £84 million annually by 2029/30. The rationale behind this cut, as explained by the Cabinet Member for Finance, Councillor Graham, is that the government has provided Council Tax flexibility for 2027/28 and 2028/29, allowing increases above the standard referendum limit without a local referendum. He also stated that the government has given us that flexibility, it's there to be used and if we don't use it we will not be able to fund the median term financial strategy. It's not political in any way, this is just factual from officers.

The council's financial sustainability is also impacted by an inherited budget gap requiring £50 million of reserves to balance the current year's budget and ongoing demand pressures in social care and homelessness. The Quarter 1 Financial Monitoring report for 2026/27 states that the primary drivers for the projected overspend are demand pressures in Adult Social Care, particularly for older people and adults with learning disabilities, and increased costs in Children's Services due to rising complexity of need and placement costs. Housing is also facing pressure due to increasing demand for temporary accommodation.

Officers confirmed that without a Council Tax increase above the government's referendum limit, the council's budget would not balance. If the proposed Council Tax hike is not implemented, the council's budget would not balance. Mrs. Mary, Executive Director of Finance, confirmed that without an increase in Council tax above the government's referendum limit, the Council's budget would not balance. Councillor Graham further elaborated that if the opposition's policy of not increasing Council Tax by more than 4.99% in a given year were followed, even with their positions on spending and on investor-save policies, they would already be unable to set a balanced budget this April, and between now and the end of the Council term would be some £400 million adrift.

The proposed increase, if implemented in 2027/28, would see Wandsworth's share of the Band D Council Tax rise from £510 to £1,468, resulting in an indicative total Band D bill of approximately £1,978. This represents a 94% increase on the current year's charge.

Councillor Graham, Deputy Leader of the Council and Cabinet Member for Finance, stated that the proposed increase was a planning assumption and that the final decision on Council Tax would be made by Full Council in March 2027. He also highlighted that the government had provided Council Tax flexibility for 2027/28 and 2028/29, allowing increases above the standard referendum limit without a local referendum.

However, arguments were made that this significant Council Tax increase would have a detrimental effect on residents, with a petition against the increase garnering over 10,000 signatures. Concerns were raised about the impact on the elderly, pensioners, key workers, and single-income households. Councillor Henson questioned the modelling for a single 94% Council Tax increase compared to a phased increase over two years, asking for details on the effect on reserves, borrowing costs, and collection rates. Mrs. Mary, Executive Director of Finance, confirmed that phasing the increase would significantly reduce reserve balances.

The council has explored and is implementing several cost-saving measures beyond the proposed Council Tax increase. The Medium-Term Financial Strategy (MTFS) outlines a combination of measures including £79 million in ongoing savings from service reforms and demand management, a reprioritisation of the capital programme to reduce borrowing, and a controlled use of reserves. The Spending Review Final Report also details specific savings across various portfolios, such as:

• Children's Services: Savings from prevention and demand reduction, third-party spend review, establishment efficiencies, and income generation.
• Adult Social Care: Savings from prevention and demand reduction, third-party spend review, establishment efficiencies, and income generation.
• Housing: Savings from prevention and demand reduction, establishment efficiencies, and income generation.
• Enabling Corporate Core: Savings from sound financial management, corporate services redesign, and rationalising the estate.
• Environment: Savings from income and revenue protection, service redesign, and delivery models and contracting.
• Growth & Place: Savings from growth plans, service redesign, and commercial income.
• Capital Programme Reductions: Removal or reduction of uncommitted schemes totalling £77.9 million.

The council's strategy for supporting vulnerable residents affected by the proposed Council Tax increase involves a strengthened approach to the Council Tax Reduction (CTR) scheme. The report states that the council will maintain a generous Council Tax Reduction Scheme, with proposals to provide continued support of up to around 50% for eligible working age households, alongside continued support for pensioners. The proposed approach aims to broaden the reach of the scheme by expanding income bands so that more low income working households can receive support as council tax rises and will apply support more consistently and fairly across eligible households. Additionally, the introduction of a multi-year taper is also proposed so any reduction in support is gradual. The council also plans to contact all households with email addresses to gather more detailed information on individual impacts and has strengthened our council tax arrears and debt recovery teams. We've increased our financial inclusion officer teams and we've transferred a significant amount of resource to tenancy sustainability and council tax account sustainability. They will help people where we can... the best route to financial safety is engaging with us. If people engage with us, we will help them with their arrears and their tenancy sustainability either in the private or in the social rented sector. And we will work with people on their accounts. And, you know, we go to the extent of helping people to budget. We get people linked into benefits that they're not currently claiming that they might be entitled to.

The council plans to engage with residents and stakeholders through a consultation process for the proposed changes to the Council Tax Reduction (CTR) scheme. The report states that The Council will consult on the scheme and following this have the changes agreed by Council. The level of consultation required for changes to CTR has been scaled back from the initial scheme and it is no longer necessary to write to every Council Taxpayer. However, it is important that the consultation is available to both Council Tax Reduction Recipients and other Council Taxpayers e.g. a Notice in the local press directing people to a page on the Council's website. The consultation page should be available for comment for at least 1 month and following analysis of the response the proposals will be submitted to committee for approval. Additionally, for the Council Tax hike itself, Councillor Graham stated that the final decision on Council Tax would be made by Full Council in March 2027. The council is also challenging the government's funding intentions through the Sustainable Communities Act and has raised with Government the impact of the proposed financial settlement on residents, businesses and communities.

For more details on the council's financial strategy, refer to the Public reports pack for the Finance Overview and Scrutiny Committee meeting on 8 October 2026.