Wandsworth, which currently has the lowest council tax rates in England, could soon face tax hikes or service cuts, according to a council report.
The report, which was presented to the Council’s finance overview and scrutiny committee meeting last month, says: “it is clear the Council will require significant ongoing reductions in spend levels or increases in income to maintain its financial sustainability”.
The government’s Fair Funding Review is one of the causes behind the looming tax rises. The document describes the review as “potentially significant for Wandsworth.”
The Fair Funding Review will be implemented from May 2026, changing government grants to councils in a bid to address regional disparities in central funding for councils.
Wandsworth Council has frozen the main component of council tax for the past two years. Image: Alexander Kapp/Wikimedia Commons
“On current figures, it’s not looking good for Wandsworth, although Wandsworth does have some reserves in the bank, which it can probably use in the short term to get them through next year’s local elections,” said Tony Travers, the Director of LSE London, a research centre focused on London’s social and economic issues.
The report noted that “current reserve levels” would be sufficient for the council to “deliver a balanced budget and protect services in the short-term.”
Wandsworth currently charges £990.07 annually in council tax for band D properties. By comparison, Kingston upon Thames, which has the highest council tax rates in London, charges £2,488.35 for a band D property.
Last year, Wandsworth froze the main element of council tax, only increasing rates by 2 per cent under the adult social care provision. It was the only London borough to not increase council taxes by the maximum allowed amount of 4.99 per cent.
A reversal of Wandsworth’s historically low council tax
Since the council tax was first introduced in the 1990s, the Borough of Wandsworth has jostled with the City of Westminster for the lowest rates.
But why is that?
The root cause lies in the very foundation of council tax. “In 1990, when the poll tax was introduced and later replaced by the council tax, the Thatcher government made a big effort to ensure that the system of giving grants was very helpful to Wandsworth and Westminster,” said Travers.
“That low local tax, which was set then, has fed its way all the way through to today and has become a big matter of tax competition,” he added.
Wandsworth residents anecdotally attribute their low council tax rates to a lower number of adult social care places. However, analysis by City News reveals that this myth is untrue.
Addressing regional disparities
“It is shocking that you have Wandsworth and Richmond down the road where you could have very similar homes that are paying something like three times the council tax for any given band,” said Aditi Sriram, an Economist at the Institute for Public Policy Research.
Speaking about the Fair Financing Review and its potential impact on Wandsworth, Sriram said: “I can’t say for sure exactly who will be the winners and losers, but I can say I think it’s about time.
“All councils are stretched, and the national government needs to be thinking about how to support them so that they can provide all these extremely important social services more effectively.”
Wandsworth currently charges almost half the council tax rates of neighbouring Lambeth. Image: Anuj Mishra
“The Council may be doing perfectly well, and it can’t help the position it has been gifted from the past,” said Travers. “But there are consequences in terms of politics England-wide, which are now beginning to put pressure on the government to do something to make council tax levels more similar from place to place.”
Wandsworth Council have been contacted for comment.
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HeadlineSuper-low council tax Wandsworth could soon face hikes, council documents show
Short HeadlineWandsworth council tax to rise
StandfirstWandsworth, which has had England's lowest tax rates for decades, could lose out in a government review of council funding
Wandsworth, which currently has the lowest council tax rates in England, could soon face tax hikes or service cuts, according to a council report.
The report, which was presented to the Council’s finance overview and scrutiny committee meeting last month, says: “it is clear the Council will require significant ongoing reductions in spend levels or increases in income to maintain its financial sustainability”.
The government’s Fair Funding Review is one of the causes behind the looming tax rises. The document describes the review as “potentially significant for Wandsworth.”
The Fair Funding Review will be implemented from May 2026, changing government grants to councils in a bid to address regional disparities in central funding for councils.
Wandsworth Council has frozen the main component of council tax for the past two years. Image: Alexander Kapp/Wikimedia Commons
“On current figures, it’s not looking good for Wandsworth, although Wandsworth does have some reserves in the bank, which it can probably use in the short term to get them through next year’s local elections,” said Tony Travers, the Director of LSE London, a research centre focused on London’s social and economic issues.
The report noted that “current reserve levels” would be sufficient for the council to “deliver a balanced budget and protect services in the short-term.”
Wandsworth currently charges £990.07 annually in council tax for band D properties. By comparison, Kingston upon Thames, which has the highest council tax rates in London, charges £2,488.35 for a band D property.
Last year, Wandsworth froze the main element of council tax, only increasing rates by 2 per cent under the adult social care provision. It was the only London borough to not increase council taxes by the maximum allowed amount of 4.99 per cent.
A reversal of Wandsworth’s historically low council tax
Since the council tax was first introduced in the 1990s, the Borough of Wandsworth has jostled with the City of Westminster for the lowest rates.
But why is that?
The root cause lies in the very foundation of council tax. “In 1990, when the poll tax was introduced and later replaced by the council tax, the Thatcher government made a big effort to ensure that the system of giving grants was very helpful to Wandsworth and Westminster,” said Travers.
“That low local tax, which was set then, has fed its way all the way through to today and has become a big matter of tax competition,” he added.
Wandsworth residents anecdotally attribute their low council tax rates to a lower number of adult social care places. However, analysis by City News reveals that this myth is untrue.
Addressing regional disparities
“It is shocking that you have Wandsworth and Richmond down the road where you could have very similar homes that are paying something like three times the council tax for any given band,” said Aditi Sriram, an Economist at the Institute for Public Policy Research.
Speaking about the Fair Financing Review and its potential impact on Wandsworth, Sriram said: “I can’t say for sure exactly who will be the winners and losers, but I can say I think it’s about time.
“All councils are stretched, and the national government needs to be thinking about how to support them so that they can provide all these extremely important social services more effectively.”
Wandsworth currently charges almost half the council tax rates of neighbouring Lambeth. Image: Anuj Mishra
“The Council may be doing perfectly well, and it can’t help the position it has been gifted from the past,” said Travers. “But there are consequences in terms of politics England-wide, which are now beginning to put pressure on the government to do something to make council tax levels more similar from place to place.”
Wandsworth Council have been contacted for comment.
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