Hammersmith and Fulham Council is planning to make savings of £17.9 million for the 2026/27 financial year as part of its Medium-Term Financial Strategy (MTFS). The proposals were discussed at a joint budget meeting of the Health and Adult Social Care Policy and Accountability Committee and the Children and Education Policy and Accountability Committee on Tuesday, January 27, 2026.
The council faces a challenging financial environment, with significant pressures stemming from demand-led increases in Adult Social Care and Children's Services. For Adult Social Care, these pressures include demographic growth, increasing complexity of need, hospital discharge pressures, market fragility, and the impact of the cost-of-living crisis. Similarly, Children's Services are experiencing rising demand, market instability, and the effects of the national economic position. These factors are contributing to substantial cost pressures.
Further compounding these challenges are the impacts of funding reforms and changes to the Business Rates Retention System. The 'Fair Funding Review 2.0' and the 'reset of the Business Rates Retention System' from April 2026 are projected to decrease the council's core spending power by £11.3 million year-on-year, a reduction of almost 4.7%. This includes transitional funding of £6.0 million in 2026/27. The reset has significantly altered the council's financial position, with the tariff H&F pays to the Government quadrupling from £12.8m in 2025/26 to £53.6m in 2026/27. This means that from an indicative gross rates collectible within the borough of £300m, Hammersmith and Fulham Council will only retain 10%.
Despite these pressures, the council's Council Tax remains among the lowest in the country. To generate additional revenue, the council proposes a 2.99% increase for general Council Tax, alongside an additional social care precept. This combined increase is expected to generate an additional £4.4 million annually, equating to a 92p per week increase for Band D properties. The report notes that Council Tax in Hammersmith & Fulham remained the third lowest in the country during 2025/26, and since 2014, the administration has cut or frozen council tax six times in eleven years.
The proposed savings of £17.9 million for 2026/27 are to be achieved through a combination of service efficiencies (£9.5 million) and collection fund savings (£8.4 million). These savings are detailed in the CEHASC Appendix 1 - Savings 2026-27.
The £9.5 million in service savings will be distributed across various departments: £4.2 million from People, £2.8 million from Place, £1.2 million from Housing Solutions, £0.6 million from Finance and Corporate Services, and £0.7 million from Centrally Managed Budgets.
The £8.4 million in collection fund savings are broken down as follows: £4.6 million from Resources (Council Tax), which relates to collection rates, reducing arrears, and the second homes premium, and £3.8 million from Resources (Business Rates), concerning collection rates and arrears.
The proposed increase in Council Tax by 2.99% and the social care precept are expected to generate £4.4 million, which represents approximately 2% of the council's net budget. The total proposed savings of £17.9 million are detailed in Table 4 of the report, comprising £9.5m in total service savings and £8.4m in collection fund savings.
The report outlines the following next steps for the budget process: an Extra Budget PC on January 12, a Draft Budget to PC on January 19, discussions with PACS and the Labour Group at the end of January/early February, and finalisation at Cabinet and Budget Council on February 25.
