pay inflation
Councils are currently addressing budget gaps and financial challenges, with pay inflation, an increase in employee salaries, identified as a financial risk.
Councils are currently addressing significant budget gaps and financial challenges, partly influenced by general inflation. Hammersmith and Fulham Council proposed a nearly 3% Council Tax increase for the 2026/27 financial year in January 2026, citing increasing demand and inflation as factors. Merton Council identified a £5.4 million budget gap for 2026/27 in October 2025, with a report noting the Consumer Prices Index (CPI) rose by 3.8% to August 2025.
Bexley Council faced a projected £1.76 million budget overspend for the 2025/26 financial year in February 2026. Pay inflation, an increase in the cost of employee salaries, is identified as a financial risk for councils, including a proposed increase for the 2026 pay award from 2% to 3%.
Key facts
- Hammersmith and Fulham Council proposed a nearly 3% Council Tax increase for 2026/27 in January 2026. Source
- Bexley Council faced a projected £1.76 million budget overspend for 2025/26 in February 2026. Source
- Merton Council faced a £5.4 million budget gap for 2026/27, identified in October 2025. Source
- A Merton Council report noted the Consumer Prices Index (CPI) rose by 3.8% to August 2025. Source
About this summary
This summary was written automatically from our published stories and the council meeting records they draw on. It describes what councils have discussed and decided; it does not take a view on any decision. Each key fact links to the story it comes from. Updated 30 September 2026. Spotted a mistake? Email community@opencouncil.network.