Kensington and Chelsea Council faces £127m funding gap, warns of potential tax hikes
Kensington and Chelsea Council is facing a projected £127 million funding gap over the next four years, prompting warnings of potential council tax hikes.
Council leader Councillor Elizabeth Campbell revealed the significant financial pressure at a Full Council meeting on Wednesday, 21 October 2026, attributing the shortfall to government funding cuts. She stressed that all efforts would be made to find savings before considering any increase in council tax bills.
Councillor Campbell stated that the council is not alone
in facing such financial challenges, with other London boroughs also experiencing significant funding gaps. She cited examples of Hammersmith and Fulham considering 150% council tax rises
and Wandsworth looking at 93% increases.
Councillor Monica Press noted that these financial pressures are affecting all inner London boroughs, which, as you say, are mainly Labour boroughs who've been very careful, also, with their finances.
While the exact strategies of other boroughs are not detailed, potential council tax hikes appear to be a common consideration.
The council's strategy for lobbying the government to mitigate these funding cuts involves utilising the Sustainable Communities Act. This legislation gives councils, backed by their residents, the right to put proposals directly to government. And government has to engage with them.
Councillor Campbell announced that Tomorrow morning, together with other leaders from across London, we're taking that submission to the Treasury.
She emphasised that this is not a party political fight,
with the council's case supported by Liberal Democrats, Conservatives, and Greens, as well as 1,500 residents and thousands of businesses. The coalition is united in its conviction that the government's actions are unfair and unreasonable
and is asking the government to think again.
However, the Labour group, represented by Councillor Press, does not believe that challenging the government directly via the Sustainable Communities Act is a good use of council officer time and limited council resources.
Instead, their approach is to advocating, along with London councils and our local MPs, that the transition be softened and lengthened by allowing inner London boroughs to retain up to 50% of the new high-value council tax surcharge and a larger percentage of our business rates during this transition period.
Further details on the council's financial situation and its spending can be found in the Public reports pack and the Agenda frontsheet for the meeting. The Draft Minutes from a previous meeting are also available.